The global smartphone market is anticipating a dip in demand as fears of a recession grow. As a countermeasure, smartphone brands have been minimizing their production levels to avoid sitting on large stockpiles of unsold inventory.
However, it appears Samsung is already facing this problem as a recent report claims the brand is stuck with up to 50 million unsold units in distributor stock.
At the beginning of the year, Samsung aimed to produce 300 million units but later decided to cut back to 270 million. 50 million is roughly 18% of that. Normally, “healthy” unsold stock would be around 10%, but at this rate, it’s a miracle Samsung gets to hit that target.
To make matters worse, you may think it’s the flagships that are doing bad but it’s actually the Galaxy A series that make up the majority of the unsold inventory, contrary to its boom in sales these past two years.
Suggesting people living within this price range are bearing the brunt of the current economic situation. It goes to show that no matter how affordably priced these smartphones are, they are not a top priority for someone struggling financially.
A lot is going on around the world that is affecting smartphone demand. From the recent lockdowns in China to the Russia and Ukraine conflict, the world is in a commodity super cycle that has greatly reduced purchasing power globally.
Whether the situation improves remains unclear. Meanwhile, Samsung will continue to cut back on production so that its unsold inventory issue doesn’t get out of hand.
Alfred Gitonga is a passionate tech news writer with a deep interest in smartphones and related technologies. He is a staff writer at Mobitrends.co.ke.
