Samsung has 50 million smartphones in stock

Samsung has 50 million smartphones in stock

According to a new report from The Elec , Samsung has almost 50 million smartphones in stock waiting to be sold. Interestingly, most unsold phones are Samsung Galaxy A mid-range smartphones. In previous years, they were consistently among the best-selling equipment in the world.

The 50 million facility stock represents more than 18% of the estimated supply of 270 million units in 2022. Usually, only about 10% of the total annual supply remains in the distributors' stock at this time. Almost double the number of unsold units is therefore a worrying sign for Samsung, as well as for the entire smartphone industry. The Korean giant will probably have to apply significant discounts to most of its models in order to be able to sell its stocks.

Weak demand for affordable Samsung devices suggests that people buying phones in this price range are paying the price for the global economic situation. Some consumers may also be more attracted to smartphones from competitors. For example, Xiaomi, Redmi or Poco, which generally offer a better price-performance ratio. Poco will also launch two new mid-range smartphones tomorrow - the Poco X4 GT 5G and the Poco F4 5G.

SAMSUNG - WHAT WILL HAPPEN TO THE 50 MILLION PHONES IN STOCK? 

However, we know that most of the manufacturer's fans still like the Galaxy A. In 2021, they accounted for more than 50% of Samsung smartphones sold. "The mid-range A-Series has been a major driver of Samsung's smartphone catalog over the past few years," said Liz Lee, chief analyst at Counterpoint. Unfortunately, things seem to have changed for Samsung.

A report by The Elec now announces that Samsung makes 20 million smartphones a month. It covers the period from January to February 2022. In order to better respond to the decline in demand and high inventories, the Korean company apparently halved production in May, to just 10 million units. The problem, as has often been the case for almost two years, is the closure of Covid-19 in China, the Russian invasion of Ukraine and rising commodity prices.

The Korean company may have overestimated consumer demand when it set a production target of 334 million units by 2022 at the end of last year. However, an unexpected slowdown, according to The Elec, forced the company to reduce its supply targets to 270 million. In total, there would be almost 30 million fewer Samsung smartphones to be built this year. Component orders from Samsung suppliers also fell by 30 to 70% between April and May. This was due to a drop in demand.

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