Phone

Samsung may not reach its annual smartphone shipments target

Despite the fierce competition, Samsung is still the largest smartphone vendor in the world by a substantial margin. Though the company was able to retain the top spot, growth has mostly stagnated, particularly in the developing markets of Asia. The slowdown seems to be affecting the ambitious goals Samsung has set for itself.

According to a report in The Investor, Samsung is unlikely to reach its annual smartphone shipments target this year. The company reportedly set a target of 350 million smartphone shipments this year, but now believes that it may fall short of the mark. The failure is attributed to the increasing market saturation, less than expected Galaxy S9 sales, disastrous performance in China, and growing competition.

Samsung’s original target was 320 million shipments

Interestingly, the report states Samsung’s original target for 2018 was 320 million shipments, but the company apparently revised the target after the Galaxy S9’s strong preorder numbers in the first quarter. Also, the 350 million shipments target set by Samsung is higher than what it achieved in the previous years. According to the data from Strategy Analytics, the company shipped 319.7 million, 309.4 million, and 319.8 million units in 2015, 2016, and 2017 respectively.

Samsung shipped around 78 million smartphones in the first quarter of this year. In the second quarter, the shipments are expected to be around 73 million units according to the analysts quoted in the report. Underwhelming sales of the Galaxy S9 series is considered as one of the reasons for the downturn.

It appears Samsung might have miscalculated the demand for the Galaxy S9 and S9+ based on initial reception from customers. Contrary to the earlier optimism, analysts are now projecting the annual sales of the Galaxy S9/S9+ to be around 30 million. If that turns out to be true, it will place the latest Galaxy flagships at the bottom of the Galaxy S series sales charts since 2012.

All of this is bound to impact Samsung’s bottom line. Investment firms are forecasting Samsung will post an operating profit of 2.3 trillion won in the second quarter, down 43.3 percent from Q2 last year.

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