The global smartphone market is expected to see a dip in demand as fears of a recession grow. That’s why the world’s leading smartphone manufacturers have been reducing production. They wouldn’t want to be sitting on huge stocks of unsold phones.
It appears that Samsung is already facing this challenge. A new report claims that Samsung has a whopping 50 million units stuck in distributor stock. These phones have not been sold to customers and are just lying idle with Samsung’s distributors across the globe.
Samsung’s mid-range phones are not selling well
Samsung is reportedly estimating shipments of 270 million smartphones in 2022. 50 million is roughly 18% of that. It paints a worrying picture. 18% of Samsung’s entire expected smartphone shipments for the year are currently unsold. Normally, unsold inventory is usually around 10% of total shipments.
This indicates that Samsung may be seeing low demand for its smartphones. While you might think that the more expensive flagship and high-end devices will be the most affected, that’s not the case. It’s the mid-range Galaxy A series that makes up the vast majority of smartphones in the inventory that remain unsold.
Low demand for Samsung’s affordable devices suggests that people who purchase phones in this price range are bearing the brunt of the global economic situation. For someone struggling with their finances buying a new phone, no matter how affordably priced it might be, is not going to be at the top of their priorities.
Samsung was reportedly manufacturing 20 million units of smartphones per month from January to February 2022. It has decreased production by half to just 10 million units in May, likely responding to high inventory levels and low demand. It was reported last month that Samsung has decided to cut its smartphone production by 30 million units this year.
Whether the situation improves remains to be seen. In the meantime, Samsung may continue to limit production so that its unsold inventory problem doesn’t get out of hand.
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