Because of the invasion of Ukraine: Samsung is stuck with an inventory of 50 million smartphones
In the shadow of fears of a global recession, smartphone makers are reducing production volumes so as not to get stuck with inventories.
A report from Korea claims that Samsung is already dealing with the problem and an inventory of 50 million devices is stuck with resellers
Niv Lillian
23/06/2022
Thursday, 23 June 2022, 11:09 Updated: 11:26
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Samsung (Photo: ShutterStock)
As the global smartphone market is about to take a hit as fears of a global recession grow, smartphone makers have reduced production volumes so as not to get stuck with inventories.
But it seems that Samsung is already suffering from the problem: According to a report on the Korean website The Elec, Samsung has no less than 50 million units stuck with resellers.
These are units that were not sold to customers, and are simply lying in warehouses.
It is estimated that Samsung will produce 270 million phones this year, so 50 million is about 18% of that.
While Samsung's flagship phones continue to be snatched from the shelves, A-Series mid-range phones are not selling well, and this is not necessarily related to Samsung:
for those whose financial situation has deteriorated, replacing a smartphone is simply not its top priority.
The jump in inflation due to the war in Ukraine also did not benefit sales.
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Stuck on stock: Samsung smartphones (Photo: Samsung)
In the last quarter of 2021, Samsung pushed for high production targets of over 300 million phones this year, and estimated that post-Corona demand would continue.
But apparently, the company has missed out on its optimistic assessments, and is now facing the consequences.
In the first half of the year Samsung produced about 20 million phones a month, and now in May the company reduced production to 10 million phones a month.
It is not clear what the continuation of the trend will be, but apparently, similar to other manufacturers, production has been reduced to deal with excess inventory.
Samsung's response
We contacted Samsung for a response, and will be updated when it is received.
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