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The global economic crisis has had an effect on all industries, and Samsung is no exception. Despite its status as one of the top two mobile devices in the market, the South Korean entity is also witnessing a decline in demand.
The smartphone industry is currently experiencing a major crisis, with demand decreasing and the threat of another recession looming over them.
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IDC (the International Data Corporation) recently projected a decline in smartphone shipments by 3.5% for the year.
Another report revealed that Samsung currently has millions of unsold phones in stock, showing that the prediction is in effect.
Samsung has over 50 million phones in their inventory as reported by media outlet Elec. Comprising the majority of the surplus units is the mid-range Galaxy A series.
According to sources, Samsung hopes to ship 270 million phones this year, highlighting an 18% failure rate for their sales goal with 60 million unsold phones
The South Korean tech giant Samsung appears to have overestimated sales in the first half of this year, as their inventory is at an all time high. Unsold inventory typically accounts for 10% of a company’s total shipment.
Elec reported that Samsung has been experiencing a decline in production. The number of phones produced in January and February decreased from 20 million to 10 in May, which made sense considering inventory growth in the middle of a drop in demand.
While it isn’t confirmed, Samsung is reported to cut smartphone orders by almost 10% this year, reducing the number from 310 million units to 280 million, according to South Korea’s Maeil Economic Daily.
The smartphone industry has been experiencing some major problems, but it’s not just Samsung. Other developers are lowering their expectations amidst the inflation and supply chain disruptions caused by the Russia-Ukraine war.
Although there is an economical crisis, the tech giants still plan to make big announcements in the second half of 2022 with Samsung announcing its new models in August while Apple will follow up in September with the revelation of the iPhone 14 lineup.
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