According to Korean sources, Samsung would have in stock well 50 million smartphones, ready to be sold. The decline in demand for smartphones seen at the beginning of this year has forced the company to put aside many devices, especially the serie Galaxy A.
Samsung would have 50 million smartphones in stock
They are ready to be sold, but the demand has dropped. So Samsung waits and holds approx 50 million smartphones. At a time when computers and cars are short of materials and customers have to wait months, smartphones are more than people are willing to buy.
The drop in sales, due to the deteriorated economic and geopolitical conditions especially in Europe, comes after an exceptional year of sales. Which may have resulted Samsung to overestimate the demand. Indeed the company expects to sell 270 million mobile devices this year. So 50 million represents 18% (although some more optimistic estimates are worth 10%).
Last year, the production of smartphones held an incredible pace. So much so that at the end of the fourth quarter of 2021 Samsung had even evaluated a 334 million units the annual production for this year. But the beginning of 2022 was not so explosive, quite the contrary.
The impact of the lockdowns in China has impacted the production chain of many technology departments. But it also has an impact on store demand. The invasion of Russia, a market from which Samsung, like many other companies, has decided to withdraw, has taken away an important slice of revenues.
The company has therefore reduced the requests for semi-finished products to its producers, which would be dropped from 30 to 70% according to Korean sources (The Elec). In all likelihood, the company wants to use up its reserves first. Especially of the mid-range products of the A series. In fact it seems that the sale of the top of the range of the serie Galaxy S e Z went as planned.
At the moment, however, Samsung has not officially communicated the matter, perhaps we could learn more about the situation in the next quarterly report. We will keep you informed.