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Samsung Reports Decline in Profit but Anticipates Business Improvement Driven by Chips 

A visitor looks at Samsung Electronics Co.'s new Galaxy S24 series smartphones at a Samsung showroom in Seoul, South Korea, 31 January 2024. (EPA)
A visitor looks at Samsung Electronics Co.'s new Galaxy S24 series smartphones at a Samsung showroom in Seoul, South Korea, 31 January 2024. (EPA)
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Samsung Reports Decline in Profit but Anticipates Business Improvement Driven by Chips 

A visitor looks at Samsung Electronics Co.'s new Galaxy S24 series smartphones at a Samsung showroom in Seoul, South Korea, 31 January 2024. (EPA)
A visitor looks at Samsung Electronics Co.'s new Galaxy S24 series smartphones at a Samsung showroom in Seoul, South Korea, 31 January 2024. (EPA)

Samsung Electronics on Wednesday reported an annual 34% decline in operating profit for the last quarter as sluggish demands for its TVs and other consumer electronics products offset hard-won gains from a slowly recovering computer chip market.

The South Korean technology giant said it expects its business to improve throughout 2024, forecasting larger demands for semiconductors that power artificial intelligence features increasingly used in smartphones, personal computers and other products. However, macroeconomic uncertainties could continue to affect its business in the near-term.

Samsung’s operating profit was measured at 2.8 trillion won ($2.1 billion) for the three months through December, compared to 4.3 trillion ($3.2 billion) from the same period last year. Its operating profit for the full year 2023 was at 6.5 trillion won ($4.8 billion), which marked an 85% decline from 2022 and represented the company’s lowest since 2008, when global markets were weathering a financial crisis.

While the company’s semiconductor division posted a loss of 14.9 trillion won ($11 billion) in 2023, the losses narrowed during the fourth quarter, with the DRAM business returning to profit. The company said in October that it plans to more than double its production capacity of advanced high-bandwidth memory chips in 2024 to respond to demands created by AI.

“In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues,” Samsung said in a statement.

The company is also focused on boosting its sales of its latest smartphone, the Galaxy S24, which is built with an array of new features enabled by AI, including live translation during phone calls in 13 languages and 17 dialects.

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Google Offers to Loosen Search Deals in US Antitrust Case Remedy

The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
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Google Offers to Loosen Search Deals in US Antitrust Case Remedy

The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake

Alphabet's Google proposed on Friday a loosening of its agreements with Apple and others to set Google as the default search engine on new devices, in a bid to address a US ruling that it unlawfully dominates online search.

The proposal is muchu narrower than the government's push to make Google sell its Chrome browser, which Google called a drastic attempt to intervene in the search market.

Google urged US District Judge Amit Mehta in Washington to move cautiously in deciding what the company must do to restore competition, after his ruling that the company holds an illegal monopoly in online search and related advertising. Courts have cautioned against imposing antitrust remedies that chill innovation, Google said in court papers.

That is especially true "in an environment where remarkable artificial intelligence innovations are rapidly changing how people interact with many online products and services, including search engines," Google said.

While Google plans to appeal that ruling at the end of the case, it says the upcoming "remedies" phase should focus on its distribution agreements with browser developers, mobile device manufacturers, and wireless carriers.

The judge found the agreements give Google a "major, largely unseen advantage over its rivals" and result in most devices in the US coming pre-loaded with Google's search engine.

The agreements are hard to exit, the judge said, especially for Android manufacturers, which must agree to install Google search in order to include Google's Play Store on their devices.

To fix that, Google could make them non-exclusive and, for Android phone manufacturers, unbundle its Play Store from Chrome and search, the company said in its proposal.

Google would allow browser developers that agree to set its search engine as the default to revisit that decision annually under the proposal.

REVENUE SHARING

Unlike the government's proposal, Google's would not end revenue sharing agreements, which pass a portion of ad revenue Google makes from search to the device and software companies that present it as the default search engine.

Independent browser developers including Mozilla, which makes Firefox, have said the funds are crucial to their operations. Apple received an estimated $20 billion from its agreement with Google in 2022 alone.

Kamyl Bazbaz, spokesperson for search engine competitor DuckDuckGo, said the proposal attempts to maintain the status quo.

"Once a court finds a violation of competition laws, the remedy must not only stop the illegal conduct and prevent its recurrence, but restore competition in the affected markets," he said.

Google's proposal sets the stage for a trial Mehta will hold in April, where the US Department of Justice and a coalition of states will seek to show the need for wide-ranging remedies, including making Google sell off Chrome and potentially its Android mobile operating system.

The government plans to call witnesses from OpenAI, AI search startup Perplexity, and Microsoft, according to court papers.

Prosecutors also want Google to stop paying to be the default search engine, and cease investments in search rivals and query-based AI products, and license its search results and technology to rivals.

The proposals aim to spur innovation in online search, where Mehta found Google's overwhelming market share keeps competitors from gathering the search data needed to improve their products, and prevent Google from extending its dominance in search to AI.