The global economic crisis is not only affecting consumers, but it’s also causing major issues for businesses. Samsung has been no exception to this trend as they have also been suffering from the declining smartphone demand.
The smartphone crisis has hit the market hard, with sales going down and potential recessions hanging over everyone’s head.
Earlier this month, the International Data Corporation (IDC) projected a decline in smartphone shipments for the year, specifically a 3.5% decrease.
Another report reveals that Samsung has millions of unsold phones in stock, a testament to the IDC report.
As reported by media outlet Elec, worldwide distributors have 50 million Samsung phones in their inventory. The mid-range Galaxy A Series is a significant portion of the unsold supply, both domestically and internationally.
Sources emerged that Samsung plans to ship 270 million phones this year, emphasizing how 60 million unsold phones represented 18% of the sales goal.
With a higher inventory than expected, it’s clear that Samsung overestimated sales in the first half of the year. Usually, unsold inventory accounts for 10% of any company’s total shipment.
Elec also reports that Samsung produced over 20 million phones each month in January and February, but the number dropped by half to 10 million in May. The decline in production may be a response to inventory growth amidst decreasing demand.
The rumor of Samsung cutting orders for smartphones this year was revealed in South Korea, where they are expected to reduce production.
The report by Maeil Economic Daily reveals that while the number is not yet confirmed, the order volume is expected to go from 310 million units to 280 million, nearly 10% fewer than planned.
The smartphone industry has been experiencing inflation, supply chain disruptions, and the Russia-Ukraine war, which is causing Samsung and its competitors to lower their expectations.