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Samsung Sees 95% Drop In Profits For a Second Consecutive Quarter (androidauthority.com) 69

Posted by BeauHD from the not-looking-good dept.
For the second consecutive quarter, Samsung reported a 95% decline in year-over-year profits. "It appears Samsung brought in a profit of 0.67 trillion ($523.5 million) Korean won (KRW), which is a drop in the bucket to the 14.12 trillion KRW ($11.06 billion) it made last year," reports Android Authority. From the report: Samsung attributes this loss in profit to the decline in smartphone shipments due to "high interest rates and inflation." As a report from Counterpoint Research suggests, the US smartphone market fell by 24% year-on-year in Q2 2023. Samsung, in particular, saw a 37% yearly decline in shipments, giving it 23% of the total US market. Something else that doesn't seem to bode well is the fact that Samsung believes the boost that came from the launch of the Galaxy S23 series has faded.

However, it's not all doom and gloom. The manufacturer highlights the launch of the Galaxy Z Flip 5 and Galaxy Z Fold 5. It also believes that the smartphone market will make a return: "For the second half of 2023, the overall smartphone market is expected to return to year-on-year growth, especially in the premium market."
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Samsung Sees 95% Drop In Profits For a Second Consecutive Quarter More

Samsung Sees 95% Drop In Profits For a Second Consecutive Quarter

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  • "high interest rates and inflation" (Score:1)

    by Anonymous Coward

    Now that it's starting to get noticed on the bottom line of corporations you'll see them asking the government to fix the problem. Like thanks guys we've been telling the government to fix inflation and wages for years now.

    • Some guy has to publicly report of the 95% collapse of their profit. They obviously have to offer a justification. They don't have to show new unexpected explanations, just an explanation that corresponds to reality. That they use this explanation means they exclude that the reduced profit came from wrong investments, large government fines, technical problems at their factories, supply chain delays, or a reduced market in e.g. Russia. It's useful information for analysts.

  • I recently replaced the battery in a Galaxy Note 10 and it was doable with an iFixIt toolkit. That's one more replacement cellphone they won't sell.

    Come on Samsung, it's not that hard! Just do what Apple does: use stronger glue and DRM'ed components so the OS will refuse to accept replaced parts. Then sales will pick up.

    • Re:They should make phones more difficult to servi (Score:4, Insightful)

      by guruevi ( 827432 ) on Friday July 28, 2023 @08:04PM (#63722958)

      Samsung phones don’t need replacement parts, the Android OS is outdated after about 3 years and nobody gives updates. Hence why many people stop buying Samsung phones, when there is an economic downturn and all their friends with iPhones can keep the same device they’ve had for years, Android users need to buy more low-end cheap phones.

      • Apple users have to keep the same devices for years because they cost so much. As a Moto user I can replace my phone four times as often and still spend less. Their phone will be better than my first phone, about equal to my second, and inferior to the last two... Especially since they will probably have damaged their screen by phone two or three. I see people using iPhones with damaged screens constantly as a result of their high prices, and high repair prices.

        • I use my phone for more than 4 years because I don't like tossing things that are perfectly good away.

          And I've never cracked a screen. My friend stopped buying Samsung phones because the phones wouldn't stop cracking on her. Now she just buys an iPhone that's a generation or two old and much cheaper. No problems since.

          And, like, that's very anecdotal data, but I don't see that your example is much better.

          • iPhones aren't more or less likely to BE damaged AFAICT. They're just more likely to be USED after being damaged because of the prices. You can get a pretty good Android phone (octocore, 3-4GB) for $100-200. That's cheaper than just a new screen for an iPhone...

            • My 4-year-old iPhone is waterproof to 18' for 30 minutes. My 2-year-old Samsung won't even get in the baby pool.

              • Do you often go swimming with your phone?

                • I do, actually. I've used it in the pool a few times to capture my swimming so I could analyze it later. Being able to dunk it underwater is actually kinda handy.

                  That said, I think most high end phones are waterproof now.

              • Re: (Score:2)

                by Luthair ( 847766 )
                That is interesting given Samsung was producing water resistant phones a year before Apple. Heck, Sony was doing it 2-years before Samsung.

            • Maybe. And we can probably debate whether or not that's actually good--if the phone is largely still useable with a cracked screen, maybe it's good that people hold onto them. Most people don't trade in their cars because of a cracked windshield; sometimes you can drive for years with a crack in the windscreen with no issues.

              But let's also not pretend that Apple phones aren't simply more usable for more years than most Android phones *with no additional work*. I know someone will jump in and try to say you

      • That policy started for flagship/S series devices released in 2022. Before that it was three years of OS updates starting with, IIRC, the S10/Note10/Tab S6.

        And then a year of security updates after the final OS update.

        My Samsung Galaxy Tab S21 Ultra shipped with Android 11, and it will be eligible for Android 15.

        My Samsung Galaxy Tab S6 Lite 2022 edition I bought a couple of weeks ago for $215.00 was released with Android 12, and should be eligible for Android 16.

        The new Galaxy Tab S9 series that just got r

        • Re: (Score:1)

          by guruevi ( 827432 )

          Android releases yearly or faster, that means 4-5 years of updates after which your phone is effectively e-waste unless you don’t care about security.

          My iPhone 6S is now over 7 years old and still gets security updates and will eventually stop getting updates within ~2 years. Even Fairphone can’t keep up their hardware with the Android OS or match Apple in longevity.

          • If I cared about security would I pick Android over other options? Convenience is the #1 priority. And an outdated phone that doesn't get updates and apps start breaking is not convenient.

          • Google's Project Treble takes care of a large portion of that concern. And Play Store never expires from providing security against bad apps. Unless your version of Android becomes so updated that your device is barred from accessing the Store, then I'd say your device could start facing usability issues, unless you loaded Lineage OS, or something like that.

            https://www.computerworld.com/... [computerworld.com]

            My Samsung Galaxy Tab S4 is stuck on Android 10, but runs great, and I use the free Avast Security app, which downloads

            • I meant to write "unless your device becomes so outdated". I had that happen to my HTC Flyer, a device from 2011 with Android Honeycomb, a few years ago, though I kept it/keep it as a curiosity, piece of history. Still runs Netflix though!

      • It is not like the phone suddenly stops working after 3 years. I have written this on a tablet that runs Android 7.

        • Re: (Score:2)

          by MrL0G1C ( 867445 )

          That depends on the app's you use, I personally don't care what android OS is on the phone but I have had an app refuse to work due to the OS not being new enough.

      • Why buy a note? The motorola stylus is $400 CDN!
      • Actually, I just started buying Samsung (again) last year, since in the Android market they are the only maker who offer 4 years of upgrades plus one additional year of security updates on loads of phones, not just the Galaxy S flagship series.

        Note that this info isn't new, sadly it's still not common knowledge, also due to up modded false information like the post I'm replying to. Too many Apple lovers with mod points?

        https://www.androidauthority.c... [androidauthority.com]

        • Re: (Score:1)

          by guruevi ( 827432 )

          Apple guarantees 5 year after the last sale of a product for ‘current OS’ support and then an additional 2 versions (practically at least 2 years) of security and compatibility updates. If you buy a brand new iPhone after release, you have roughly 8-10 years of support. Samsung offers 4 years of support after release (which means if you buy near the end of a release cycle and buy a discount phone, you only get 1-2 years of upgrades)

          That means best case scenario, you need 2 Samsung phones for eve

          • iPhone battery degradation is pretty severe after 4 years.

          • If an iPhone is an option for you, that's great. On the other hand, buying a brand new Samsung mid level device just after release sets you back about half as much as an iPhone, so you can afford two in the same time period. Btw Samsung devices get 4 years of upgrades and one year of security updates on top, making 5 years total, and waiting 2 years isn't necessary or really possible, last year's A33 model is already hard to find. Its successor the A34 is on a discounted price already just a few months fro

    • Re: (Score:2)

      by drolli ( 522659 )

      And make the SW support worse. 10 years ago a high end Samsung device did receive at most updates for 2y and there were grotesque software bugs (Galazy Note 2 had writable memory device for everybody).

  • They're still profitable (Score:3)

    by Can'tNot ( 5553824 ) on Friday July 28, 2023 @08:05PM (#63722960)
    A 95% drop in profits means that they're still profitable. A 95% drop in revenue would be alarming, that would represent a huge shift in what people are buying and would instigate massive layoffs at Samsung. A 95% drop in profits hardly seems noteworthy, every company has its ups and downs. And this isn't even a down, it's just less up.
    • So year over year profits can't go up indefinitely?

      • Gasp! What heresy is that? Eternal growth is the cornerstone of the capitalist gospel!

        Unclean! Unclean!

        I mean...

        Commie! Commie!

    • Re:They're still profitable (Score:4, Interesting)

      by backslashdot ( 95548 ) on Friday July 28, 2023 @08:41PM (#63723036)

      95% drop in profits is a huge warning/wake up. If the trend continues it's not sustainable.

      • Well of course it is sustainable, they could lose 95% of their profits every quarter forever, but I get your meaning. The article is talking about this [ycharts.com] chart, and using a big percentage to make it sound alarming, and I'm just saying, it's not really that [ycharts.com] alarming. I wouldn't even call it noteworthy for anyone outside the company.

        Actually, if you extend that second chart out in time you can see a little of what's going on. Two quarters ago they had record high profits, for some reason, just for that one q

        • Actually, if you extend that second chart out in time you can see a little of what's going on. Two quarters ago they had record high profits, for some reason, just for that one quarter. Then record low profits in the quarter after that.

          We call that market saturation. Everyone who wanted their new phone bought one, and then sales dropped because demand had already been met.

          Infinite growth is a fallacy. Marketing hype leads to false estimation of demand, and overproduction -loss not growth. Proper projection of demand for new product, and building too meet that demand, leads to stability. Stability doesn't leave stock markets drooling, but it is reality.

          • "and then sales dropped"

            Except no. For *revenue* it's the third highest Q1 ever for Samsung Electronics. For *profit* it's their worst Q1 since 2009. They're selling a lot of product but their costs are out of line

        • I actually looked to see whether this was another case of the current quarter being on-trend while being compared to an above trend prior quarter. it turns out that this is the worst Q1 profit since 2009, at 0.6 trillion won. The next lowest is Q1 2011 at 2.8 trillion won and Q1 2010 at 4.4 trillion won. Q1 2023 is in fact below trend.

      • Re: (Score:2)

        by kmoser ( 1469707 )
        Let's keep in mind that despite the "drop", they still made $0.67 *trillion* dollars profit, which is a staggering amount of money. If they continued to make "only" $0.67 trillion profit every year I think they'd do just fine.

        • Let's keep in mind that despite the "drop", they still made $0.67 *trillion* dollars profit, which is a staggering amount of money. If they continued to make "only" $0.67 trillion profit every year I think they'd do just fine.

          No, that's 0.67 trillion won, which is about 0.5 billion dollars, which for a company of Samsung's size is staggeringly low. One quarter of bad numbers might be an accounting anomaly, but two quarters should ring some alarm bells.

          • Re: (Score:2)

            by kmoser ( 1469707 )
            Whoops, you're right, won, not USD. But still, despite the fact that it's much lower than it has been in the past, it's still *profit*. Unless they're hit with some huge unforeseen expenses, they're still making loads of money and aren't about to go out of business, even at that "low" rate. It's the capitalist, growth-oriented mindset that assumes if you make less profit than you did in the past, you're somehow "losing" money and in danger of disappearing.

      • 95% drop in profits is a huge warning/wake up. If the trend continues it's not sustainable.

        Depends on what caused the drop. If the 95% drop was due to a fundamental market shift it would be a huge warning/wake up. If it was due to singular external factors such as ... insane inflation combined with overstocking of DRAM chips while the rest of the industry was anticipating a drop in sales then no, it's more of a silly blip caused by a silly decision.

      • Oh woe is me. I only made half a billion dollars in 3 months.
        Where did I put that tiny violin.

        • What about the next 3 months? You might lose money and the share price may fall. Furthermore, Samsung isn't one person; it's (millions?) of shareholders .. not all of whom are wealthy.

      • Let's see, we're coming out of dark days with COVID-19 in which people already replaced lots of devices (one, two, or there years ago, they last longer nowadays), plus a raging war that most didn't expect to last this long (specialists did), so now with the economy down, inflation and or recession depending on who you listen to, well yes, let's hope the trend doesn't continue. It would not just be bad for Samsung...

      • Re: (Score:2)

        by mjwx ( 966435 )

        95% drop in profits is a huge warning/wake up. If the trend continues it's not sustainable.

        A 95% drop in profit is infinitely sustainable. If I make $100 in profit, it drops by 95%, I've still made $5, next year it's $0.25, year after that $0.012, so on and so forth... As long as I'm not making a loss it can be sustained.

        It's the drop in revenue that isn't sustainable, however I suspect a large part of Samsung's problem isn't revenue decreasing but costs increasing (which also isn't sustainable).

    • A 95% drop in profits means that they're still profitable. A 95% drop in revenue would be alarming, that would represent a huge shift in what people are buying and would instigate massive layoffs at Samsung. A 95% drop in profits hardly seems noteworthy, every company has its ups and downs. And this isn't even a down, it's just less up.

      Yeah, R - E = P, all it means is that R and E got really close, a tiny bit closer and it could have been a 99.999% drop.

      I worked for a multinational oil services company during the 2008 meltdown (oil companies stopped drilling, they stopped getting contracts). Now THEY had a 90% drop in revenue and that was noteworthy. They also stiffed me on some salary but it all ended well as they later went bankrupt.

  • I don't think it will make a comeback .. the new Z Fold 5 is almost identical to the Z Fold 4. A majority of people say it needs to be a wider form factor. When folded, it's too thin to be usable.

  • I've been a long time Android user, but around a year ago I became fed up. The interface was updated to be more "intuitive", and in turn it became like a glue-eating-child version of iOS. Android's navigational structure was appealing to it's users, and in trying to become more like iOS, they ended up getting rid of what their users loved and failing to deliver what iOS users loved For example, I used to be able to search for "Mobile Hotspot", and it would just show me the mobile hotspot settings page. Las
  • As a Samsung zealot who has used only Samsung phones for a decade, they have lost my business by removing features. The whole reason I preferred Samsung in the first place was because their phones could do things that others couldn't; They had MST for payments in more places, better VR features, kept things like the SD card slot long after others removed them... Now that Samsung has phased out all of those, there's functionally little difference between an S23 and something like a recent Pixel phone. While

    • Re: (Score:2)

      by nasch ( 598556 )

      I still miss my old Droid 3 that had a slide-out keyboard, replaceable battery, SD card, and HDMI out. If I could have all that with modern hardware I would love it, and no I don't care how thick it is.

  • "... especially in the premium market."

    Translation: We're depending on FOMO users buying the next i-Shiny to maintain sales.

    To users, the backward compatibility of the flagship S-series, is a burden on hardware and software: It's why Google is pushing all developers to Android 11, to reduce legacy software, kernels and drivers.

    I think most Samsung fans have realized the main benefit of the Samsung brand, personalizing the user experience, is shrinking. Sure, the user can load bigger and better "live" wallpapers, but that's not what the or

  • Is it possible that current smartphones are good enough? I'm still on a Note 9, have replaced the screen twice, and it's still my daily use phone. Samsung keeps pushing ads for new phones but I don't see the need. It's just a phone.

    • Re: (Score:2)

      by nasch ( 598556 )

      You're probably not going to get any more updates for the Note 9, including security patches. So if you connect to the internet you may want to either get a newer phone or put a different OS on it.

  • It's because of their OS settings (Score:3)

    by Kevin108 ( 760520 ) on Saturday July 29, 2023 @09:43PM (#63724708) Homepage

    Bloatware, locked options, spam, and inconsistent behavior of common functions. Their devices as shipped are junk. Great hardware, but fucking awful software.

  • Samsung phones don't allow you to get OEM Unlock to even appear. I personally would not touch a phone that won't allow me to install a custom OS. On top of that, if and when the screen breaks, the cost of a new screen is almost as much as the phone itself. Newer Samsung phones no longer come with an SD Card slot. Samsung wants to be like Apple, but people who buy Samsung don't want Apple like devices.

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