Good Galaxy S23 sales may have kept Samsung afloat for a change as chips didn't cut it

Good Galaxy S23 sales may have kept Samsung afloat for a change
Samsung just reported a record US$1.6 billion loss in its heretofore bread-and-butter semiconductor division. It made just US$455 million in operating profit this past quarter, a whopping 96% slump compared to Q1 of last year when it was riding high on chip demand, after the COVID-19 pandemic brought on unprecedented supply chain challenges.

Before the chip division, it used to be Samsung's smartphone business that raked in the big bucks, and it would now have to take its old role to keep Samsung profitable while the memory demand situation improves. 

The Galaxy S23 series, in particular, which earned a place in the best Samsung phones pantheon, is reportedly selling 70% better than the S22 models last year, despite the recessionary headwinds in the global demand situation. 

Needless to say, the main culprit is Samsung's excellent Galaxy S23 Ultra which not only carries the best Qualcomm mobile processor to date - custom Snapdragon 8 Gen 2 for Galaxy - but is also equipped with a brand new 200MP main camera.

Samsung Galaxy S23 Ultra

Samsung Galaxy S23 Ultra

The Good

  • Battery life is great, big improvement from predecessor
  • New Snapdragon chip is the best one in years
  • Design is improved, feels more ergonomic
  • Screen is less curved and gets very dim (perfect for night time use)
  • Camera improvements are there, but not quite huge
  • Loudspeakers sound much better now
  • You get double the storage (256GB) at base model

The Bad

  • Base model still only has 8GB RAM
  • Charging speeds have not improved
  • Haptics are still not as good as rivals
  • Camera system hasn't improved as much as hoped for
  • Expensive if you buy at full price

Samsung's shocking earnings guidance may thus result in an official quarterly results announcement where the mobile division is one of the few bright spots in its business operations, something that hasn't happened since the early Galaxy line days.

It won't be a huge profit number there, but every little bit helps to have kept Samsung still in the black during the quarter. Surprisingly enough, Samsung won't be cutting back on capital expenditures for new production capacity and new technologies.

It would rather be introducing temporary production cuts in the semiconductor division in order to decrease supply and normalize demand which is expected to rebound later in the year. In the summer, it is expected to announce a completely overhauled set of foldable phones in its clamshell and book lines, which should bring additional profit contribution from its mobile department. 

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The Galaxy Z Fold 5 and Flip 5 are expected to come with the same custom Snapdragon 8 Gen 2 chipset that is in the S23 series and sport new looks, especially the Z Flip 5 with its giant cover screen that should be a sight to behold.

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