Samsung has an unbelievably high number of brand new smartphones. The possible reasons.
Enlarge
Samsung: Smartphones are piling up in the warehouse, production shut down.
© Valeriya Zankovych/Shutterstock.com
Samsung is said to have the unbelievably high number of almost 50 million smartphones in its warehouses and at its dealers. This is reported by the South Korean news site The Elec. Above all, the mid-range smartphones of the Galaxy A series are said to make up a large part of the stacking mobile devices.
Unhealthy inventory
The Elec claims to have learned from its sources that Samsung actually wants to ship around 270 million smartphones this year. The 50 million devices lying on the heap account for around 18.5 percent of this. That’s far too much, because according to industry experts, only around 10 percent inventory would be okay. This high number of smartphones in stock shows that Samsung is suffering from sluggish demand for its smartphones.
Samsung is reducing orders
From January to February, Samsung manufactured around 20 million smartphones per month. In May 2022, Samsung then reduced the number of smartphones produced monthly to 10 million. The South Koreans are likely to react to the much too high inventories and the obviously low demand. Accordingly, Samsung ordered between 30 and 70 percent fewer components from its suppliers between April and May.
At the end of 2021, Samsung had set an ambitious annual production target of around 334 million devices for 2022, as reported by The Elec.
Possible reasons
The Elec cites the strict quarantine restrictions in China, the Russian attack on Ukraine and rising commodity prices as possible reasons for the poor demand. All of this would lead to reluctance to buy or delivery problems.
