With a new year, comes the expectations of new flagships from smartphone manufacturers, offering more performance and hopefully better value. According to a report from Maekyung, a South Korean publication, it seems like Samsung fans should be getting better value with the upcoming Samsung Galaxy S23 series.
The South Korean publication claims that Samsung will offer the Galaxy S23 series at similar prices to the ones the Galaxy S22 series launched at back at the start of 2022. If this turns out to be true, then the Galaxy S22 series should get a price drop which ties into our earlier report that Samsung will not be releasing the Galaxy A7x series this year, whose space will likely be now occupied by older flagships including the Galaxy S22.
To understand why Samsung is taking this route, we have to look into a number of factors. For starters, Samsung MX Division’s (its mobile business) revenue went up from KRW 28.42 trillion in Q2 2022 to KRW 32.21 trillion (KRW = Korean won) in Q3 2022 which is a 13.3% increase quarter on quarter, however, the company’s operating profit went down from KRW 3.36 trillion in Q2 2022 to KRW 3.24 trillion in Q3 2022, marking a 3.6% dip.
The increase in revenue is directly tied to Samsung’s flagships the Galaxy Z series and the S series having a strong year, however, the increasing prices of smartphone components ensured that the company’s operating profit took a 3.6% hit.
This leaves Samsung in a dilemma. Selling the Galaxy S23 at prices the Galaxy S22 retailed at while featuring better specs means that the company’s operating profit will take a bigger hit in 2023. However, pricing the Galaxy S23 higher risks the line-up being uncompetitive against Apple’s iPhone 15 line-up and therefore losing market share.
According to Maekyung, Samsung would rather take the slightly lower profits while remaining competitive in the market rather than risk a price hike which might turn customers away. Later in the year or in 2024 when smartphone components become more affordable, the company’s profits will then naturally pick up, assuming Samsung does not offer price cuts to the S23 series.
Despite the high-end market for smartphones typically not being affected by market forces such as inflation, the Galaxy S series and Galaxy Z series in extension retailing at similar prices to their older counterparts will go a long way in solidifying brand loyalty to Samsung while offering more reason to those rocking older flagships like the Galaxy S21 and the S20 to finally upgrade.
