Withholding tendency among Samsung users has resulted in a significant drop in the operating profit for the tech giant.
The electronics maker has reported major losses in recent months as global economic uncertainty weighed on consumers around the world, leading many people to hold on to their cell phones and laptops longer.
According to Counterpoint Research, 2023 is on track to be the worst year for global smartphone shipments in 10 years, with shipments forecast to decline 6per cent to fewer than 1.2 billion units.
In major markets like North America, “consumers are hesitant to upgrade their devices,” the firm noted in an August report.
Following the new tendency among Samsung Users, the South Korean firm on Wednesday, October 11, logged a double-digit fall in its third-quarter earnings.
It projected an operating profit of about 2.4 trillion Korean won (USD 1.8 billion) for the three months ended September. That compares with 10.85 trillion won (USD 8 billion) in the same period last year.
Revenue was also projected to drop 12.7 per cent from a year ago.
Besides the changing consumer behaviour, the tech giant was also hit by the shortage of semiconductors used in making different devices.
According to consultancy Bain, “the semiconductor industry’s post-pandemic rebound boosted capacity to the extent that some foresee an oversupply.”
However, the firm is expected to return to profitability by diversifying its portfolio and launching new products to meet the current market needs.
