Samsung Electronics, the world’s biggest smartphone maker, expects the smartphone market to contract in 2023.
The Suwon, South Korea-based Galaxy device maker said on Tuesday it sees demand for mobile devices shrinking in the current year, even after the economic challenges and disappointing sales of 2022. The company detailed its biggest profit drop in over a decade on Tuesday, saying “the business environment deteriorated significantly” in the last quarter of the year.
Mobile device makers have been especially hit by the slowdown in consumer spending that resulted from surging inflation and interest rates along with geopolitical tensions last year.
Hopes for a rebound in 2023 have been given some impetus by China’s gradual reopening after the country relaxed its strict Covid Zero policy and unwinded some of the pressure on its domestic Internet companies.
China is the world’s biggest smartphone market and is unlikely to repeat the double-digit falls in shipments and sales it saw in 2022, but Samsung’s outlook would suggest that won’t be enough to return the mobile business to growth in the near term.
“Amid prolonging geopolitical issues, continued inflation and the continued economic slowdown, we expect the smartphone market to contract in 2023, with the mass market impacted the most,” Daniel Araujo, a Samsung vice president, said on a call following the company’s fourth quarter earnings. — (c) 2023 Bloomberg LP