It looks like Samsung is planning on reducing the number of smartphones they ship in 2016. Local retailers in South Korea received a message from the company yesterday that told them to expect 12% fewer smartphones next year than they enjoyed this year.
Samsung hasn’t released any official word that gives us insight into the reasons behind their cutback, but some believe it may be due to an increasingly saturated marketplace worldwide. Smartphones are becoming less and less a luxury product and more an essential part of our everyday lives. While the scramble to adopt smartphones over the last decade made for a thriving marketplace for manufacturers, it seems like we’re hitting something of a slump as more and more people have devices that they’re happy with.
Samsung, which holds a fifth of the current market share, says they will only be manufacturing between 420 million and 430 million smartphones over the next twelve months. They claim that their focus for 2016 will be producing budget phones for developing nations. This makes a lot of sense, as entry-level Android devices are exactly what gave upstart companies like Xiaomi the edge they needed to become competitive.
In spite of their focus on less expensive smartphones over the next year, Samsung says they’re still planning to unveil their Galaxy S7 in early 2016. A Samsung official says that even though they’re adjusting their productivity and market concentration, the sales prospects for the Galaxy S7 remain high and “will help Samsung maintain its global share next year.”
What do you think of Samsung’s smartphone cutback? Savvy business move or a bad omen? Let us know in the comments below!