The global economic crisis has had a significant impact on Samsung, one of the top two mobile device brands in America, proving that even the best companies are no exception to the economic crisis.
With the recent economic crisis amid inflation, sales have been affected and people are staying home instead of going out. Smartphone demand has gone down, especially with potential recession looming.
The number of smartphones shipped is projected to decline by 3.5% this year, according to International Data Corporation (IDC) earlier this month.
A report reveals that Samsung has millions of unsold phones in stock, which indicates it may be affected by the predictions.
The Media outlet Elec reports that distributors have over 50 million Samsung phones in their inventory with the mid-range Galaxy A Series making up the majority of unsold supply.
Sources say that Samsung plans to ship 270 million phones this year, highlighting an 18% failure rate for their sales goal.
The South Korean tech giant has been overestimating sales for the past half-year, and its inventory levels indicate that it was expecting even more than what actually came in.
Samsung was reported to be producing over 20 million phones each month in January and February, but the number dropped significantly to 10 million by May. The decline is most likely caused because of inventory growth amidst decreasing demand for their products.
Samsung has been cutting back on the amount of smartphones they are producing this year. The Korean newspaper Maeil Economic Daily reported last month that Samsung’s orders were being lowered by 10%. The report also said there could even be as much as 280 million units instead of 310 million as planned.
Smartphone makers are in a tight spot as they have been hit with numerous problems such as supply chain disruptions, the Russian invasion, and inflation.
Regardless, Samsung is expected to announce their new Galaxy Z Flip 4 phone in August and Apple plans on revealing an iPhone 14 line by September.