It is not difficult to see from the data previously released by a number of research institutions that the global mobile phone market in the first half of this year can be described as dismal. Therefore, it is reasonable for major manufacturers to accumulate inventory, but how much is accumulated? According to the korean media, this number is probably far beyond your imagination.
Last week, it was reported that Samsung suspended procurement of parts due to concerns about high inventories and global inflation, and asked multiple suppliers to delay or reduce shipments of parts for several weeks. The Korean media TheElec recently revealed the specific inventory: the total inventory of smartphones in various distributors of Samsung is as high as 50 million, most of which are positioned mid-range Galaxy A series mobile phones.
Between January and February 2022, Samsung produced an average of about 20 million smartphones per month; By May, however, production had fallen to 10 million units, a phenomenon likely caused by excessive inventory and sluggish demand.
TheElec said that Samsung's shipment target this year is 270 million units, 50 million of which accounts for 18%, this proportion is not very healthy, the relatively healthy figure is about 10%, and up to 18% of the inventory shows that Samsung is suffering from the impact of sluggish demand for smartphones.
The data shows that in the first quarter of 2022, Samsung's mobile phone shipments reached 73.7 million units, the world's largest shipments, but down 4% year-on-year. The first quarter is the peak sales season after the release of Samsung's new machines, and such sales are not ideal, so it seems difficult to achieve the ambitious goal of 270 million for the whole year.
270 million has been a shipment expectation after many downward adjustments, as early as last December, Samsung set a full-year target of 390 million for 2022, and then revised several times, announced to be 310 million after the first quarter, but at the end of May, Samsung once again lowered the shipment expectation to the current 270 million, it seems that there is still room for this expectation to be lowered.
South Korean media attributed the high inventory of Samsung mobile phones to the Russian-Ukrainian war, global inflation, and China's lockdown, the first two points are common problems faced by all companies around the world, but the last point is obviously an excuse.
At present, Samsung's smartphones are very dependent on China in terms of production and sales. In 2019, all of Samsung's manufacturing plants in China were removed, and only some models are currently produced in China through ODM. In addition, since Samsung's main market is not China, the smartphone market share in China has been below 1% for many years, and survey data shows that Samsung mobile phones ranked 9th in the Chinese market between July and September 2021, with a market share of about 0.9%.
Samsung Electronics is not only the mobile phone department in the experience of inventory crisis, some sources said: Samsung's new order delay covers a number of important product line parts, including television, home appliances and mobile phones, delayed orders involving a wide range, chips, electronic parts, terminal product packaging, etc. are difficult to escape the fate of order delay.