The global economic crisis is not kind to Samsung, one of the top two mobile device brands in America.
The smartphone market has seen a major shift in recent months, as consumers continue to cut back on their spending and fears of an economic crisis grow.
The IDC (International Data Corporation) recently projected that smartphone shipments will decline by 3.5% this year, which is a worrying trend.
With millions of unsold phones in stock, it’s no wonder that Samsung is among the brands affected by this prediction.
Distribution companies have 50 million phones in their inventory with the mid-range Galaxy A Series making up a significant portion of unsold supply, according to media outlet Elec.
Sources say that Samsung plans to ship 270 million phones this year, highlighting the fact they are still heavily investing in production even with 18% less than desired.
It’s not surprising that Samsung has large amounts of unsold inventory, considering they were expecting sales for this half year to be higher than what was actually shipped, which typically account for 10% in any company’s total shipment.
The Korean company Samsung has been producing phones at a rate of 20 million per month in January and February, but this decreased to 10 Million by May. The decline could be due the inventory growth amidst lower demand for their products.
The news of Samsung cutting orders for smartphones this year sent shockwaves through the industry. In May, Maeil Economic Daily reported 10% less units than planned at 280 million instead of the planned 310 million.
The recent events in the mobile phone industry have caused developers to lower their expectations for this year. These include inflation, supply chain disruptions and Russia-Ukraine war.
Despite the looming signs, Samsung and Apple will continue to launch major phones in the second half of the year – Samsung launching the Galaxy Z Fold 4 and Galaxy Z Flip 4 in August, and Apple revealing the iPhone 14 line in September.