Samsung's newest Galaxy S smartphones a test of brand power in weak market

Samsung's newest Galaxy S smartphones a test of brand power in weak market

SEOUL/SAN FRANCISCO (Reuters) - Samsung Electronics (005930.KS) unveiled its latest premium smartphones with a focus on their powerful cameras on Wednesday, in a test of its brand power as the market for mobiles undergoes unprecedented contraction.

Analysts said the Galaxy S23 smartphone series, with its cameras and faster chips than its predecessor, could still face weak demand as consumers spend less amid surging inflation in a struggling global economy.

Acknowledging that challenge, the head of Samsung's mobile experience, or MX Business, told reporters in a briefing after the event that there was a "noticeable shift to the premium segment" in developing and emerging markets. "We intend to focus on the premium segment in developed markets as well as some of the countries where we are seeing solid growth," he said.

The smartphone maker showed off the S23 Ultra's performance at the Samsung Unpacked event in San Francisco with snippets of two films, "Behold" by Ridley Scott, director of "Gladiator" and "The Martian," and "Faith" by South Korean director Na Hong-jin both filmed using the top-line Galaxy smartphone.

It is Samsung's first-ever 200-megapixel camera sensor, and the series uses Qualcomm Inc's (QCOM.O) Snapdragon 8 Gen 2 mobile processor. Qualcomm said that with the S23 series, 100% of the processors used will be from Qualcomm.

At the event, executives from Samsung, Qualcomm and Alphabet Inc's (GOOGL.O) Google gathered on the stage to highlight their partnership in the XR space, which includes virtual and augmented reality.

Anshel Sag, an analyst at Moor Insights & Strategy, said the three worked together in the XR space about a decade ago, but the reboot to partner this time comes as Apple Inc (AAPL.O) is expected to launch its mixed reality headset this year.

"I think it's designed to give both Samsung and Google a little bit more credibility in the XR space, because they both have been pretty absent on the hardware side for quite some time," said Sag.

In the United States, the base Galaxy S23 will be priced from $799 and two higher-specification versions, the S23 Plus and S23 Ultra, from $999 and $1,199, respectively. Samsung kept the prices at the same level as for last year's model despite rises in component costs.

However, global smartphone shipments showed the largest-ever decline in a single quarter in the October-December period, when they were down 18.3% on a year earlier at 300.3 million units, according to data issued by research firm IDC last month. The figures cast doubt on forecasts for a modest recovery in the market for mobiles this year.

In that tough environment, analysts said Samsung's mobile strategy would center on profitability through premium offerings, including the S series and foldables.

"Samsung can't afford to focus on expanding volume anymore," said Liz Lee, associate director at research firm Counterpoint.

"It must boldly simplify low- and mid-range products, the parts of the market where Chinese competitors have caught up a lot."

Samsung said on Tuesday that a decline in low- and mid-range smartphone sales in the fourth quarter had been greater than expected.