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Low demand could leave Samsung with large smartphone stock problem
- Samsung is reportedly struggling to offload stock amid a slowing smartphone market.
- The company may have nearly double the number of devices than normal lying unsold at global distributors.
- The bulk of these products is apparently Galaxy A series models.
It’s difficult to be a smartphone shopper, especially as the rising cost of living bites hard. But manufacturers aren’t exempt from the knock-on effects. According to a new report, Samsung may have as many as 50 million smartphones in global distributor stocks just waiting to be sold.
Samsung may have overestimated consumer demand when it set a 2022 production target of 334 million at the end of last year. However, the unexpected slowdown has forced the company to drop targets to 270 million, per The Elec‘s source. With that revision, the company may have nearly 20% of its annual production stocks just sitting at distributors. In this case, a more normalized figure would be around 10% or 27 million devices.
See also: The best Samsung phones you can buy
This inflated stock figure suggests that the global financial crunch affecting consumers is also diminishing demand and in turn, forcing Samsung to rethink its production figures for the remaining six months of 2022. Samsung reportedly slowed its monthly smartphone production targets by half in May, responding to the lower demand for devices.
Samsung unsold phones: Which series are affected?
Surprisingly, it’s not the pricier Galaxy S22 series or Galaxy Z Fold 3 that are awaiting buyers. Instead, Galaxy A series devices make up the bulk of units yet to be sold, per the Korean outlet’s source. This further suggests that consumers could be considering other brands in the mid-range tier, hanging on to their devices a little longer, or extending their budgets to snag pricier devices. Traditionally, the Galaxy A series has been Samsung’s better sales performer.
It’s unclear if smartphone sales will pick up in 2022. If demand remains flat, Samsung will need to make space for its newer devices somehow. This could mean further production limits that could affect its latest and forthcoming lines.