Samsung, which witnessed a decline in the mobile business earnings in the fourth quarter of 2017, on Wednesday said the demand for smartphones is expected to rise owing to the growing replacement needs for premium smartphones.
The decline in the total smartphone shipment was due to a hike in marketing costs under strong seasonality and the lineup optimisation of low-end models, the company said in a statement.
The shipments of flagship products such as Galaxy Note 8, however, increased from the previous quarter.
The company's IT and Mobile Communications Division posted $23 billion in consolidated revenue and $1.8 billion in operating profit for the fourth quarter.
In order to expand the sales of premium smartphones, Samsung would strengthen product competitiveness by differentiating core features and services, such as the camera and Bixby, and reinforce the sell-out programs and experiential stores.
In addition, Samsung plans to continue optimising its mid- to low-end lineup and enhancing productivity in order to achieve qualitative growth of the smartphone business.
"Samsung will continue its efforts to differentiate its smartphones by adopting cutting-edge technologies such as foldable OLED displays," the South Korean giant said.
It will also drive forward new businesses related to Artificial Intelligence (AI) and Internet of Things (IoT) by strengthening the ecosystem based on Bixby and building on Samsung's 5G technology.
In the first quarter, Samsung expects a rise in earnings on the ramp-up of second-generation 10nm process products for flagship smartphones in 2018 and growing demand for cryptocurrency mining chips.
"In 2018, Samsung will provide 8nm and 11nm processes to meet customers' needs and start a risk production of 7-nano. In addition, we will increase its mass production capabilities at the new S3 and S4 lines for various products including mobile processors and image sensors," the company said.
Samsung will also focus on product line-ups for flagship smartphones and expand its customer portfolio. In addition, the company will improve the productivity of flexible OLED panel manufacturing.
In the first quarter this year, the company expects to increase its smartphone shipments backed by the newly launched Galaxy A8 and A8+ and upcoming release of the Galaxy flagship which will launch next month at Mobile World Congress (MWC) in Barcelona.