Samsung’s ambitious phone sales targets don’t appear to change as planned for 2022. A recent report from The Elec suggested that the brand may have as many as 50 million phones waiting to be sold in the inventory of global distributors.
According to industry sources, Samsung’s original production target was to reach 334 million devices by 2022. The number had to be raised due to a slowdown in the market in the first half of the year – due to factory shutdowns in China and the war in Ukraine. 270 million units.
However, 50 million “stranded” units still represent 18% of the adjusted target. Elec suggests that the Galaxy A-series mid-range vehicles make up a significant portion of global inventory and are the models the brand is relying on to meet its ambitious sales targets for the year.
Reduce equipment production
According to The Elec, Samsung was severely affected by sluggish demand for mobile phones in the first half of 2022. Normally, unsold inventory makes up about 10% of shipments, but the South Korean company currently holds nearly 20% of the product. Stop at dealers worldwide.
The glut of equipment in stock has halved the amount of equipment the company has produced in recent months. While monthly production was around 20 million units from January to February, that number dropped to 10 million units in May.
Samsung also reduced the number of parts orders with suppliers. According to The Elec sources, parts orders fell by 30% and 70% respectively between April and May of this year, depending on the parts.
It is worth mentioning that since the beginning of this year, the prices of raw materials for electronic products have risen sharply. Another reason that could influence the South Korean giant to reduce device demand and reconsider its sales strategy for the last six months of 2022.
Why can’t mid-range models sell?
Oddly, high-end phones like the Galaxy S22 series and the foldable Galaxy Z aren’t “stranded” models in Samsung’s inventory. Presumably, the low demand for more affordable equipment reflects the current global economic situation.
For the financially challenged, a new smartphone is no longer a buying priority. In some cases, consumers choose to keep the device for a period of time or look for a lower-value model.
Although it’s traditionally a bestseller, this proves why the Galaxy A series represents the majority of SKUs. This should change Samsung’s plans and could limit the introduction of new intermediaries in the future.
Source: The Elec, SamMobile, Android Authority