According to 01Net’s Samsung would no longer be able to sell its Galaxy A
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Samsung would suffer from a sharp drop in demand for mid-range smartphones. The Galaxy A would indeed be shunned by consumers.
Samsung would have 50 million smartphones in stock at distributors, reports The Elec. These unsold phones represent 18% of the 270 million smartphones that the brand hopes to sell during the year. In general, the unsold do not represent more than 10% of the total planned shipments.
Like most manufacturers, Samsung suffers froma drop in demand for smartphones in the world. According to estimates by the International Data Corporation (IDC), phone sales will shrink by 3.5% in 2022. Only 1.31 billion smartphones will be sold this year. The decline in the market is due in particular to inflation, which is reaching record levels in Europe and the United States, and to production difficulties in the industry.
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Samsung suffers from competition
Apparently, a large portion of unsold Samsung smartphones are Galaxy A. The brand’s mid-range SKUs are generally popular with consumers. In the last quarter of 2021, 59% of Samsung devices sold worldwide were Galaxy A, underlines a report by Counterpoint Research. It is mainly thanks to the range, whose price is contained, that Samsung has established itself as the number 1 in mobile telephony since 2016.
It’s not really a surprise. The price increase mainly affects the less fortunate customers, the core target of the Galaxy A. Consumers who opt for high-end smartphones are not as severely penalized by inflation.
This is why Samsung is counting on its future folding smartphones, the Galaxy Z Fold 4 and the Z Flip 4, to raise the bar. This year, the company hopes to sell twice as many devices with a folding screen. Almost alone in this segment, the group holds 80% of the folding telephone market.
The Galaxy A range also suffers from fierce competition brands like Xiaomi, Oppo or Realme. In recent years, Chinese manufacturers have continued to eat into the market share of the South Korean leader thanks to an aggressive pricing policy.
Samsung divides its production in two
Faced with falling demand, Samsung has revised lower sales targets last May. The South Korean giant would have halved its monthly phone production, from 20 million to 10 million.
Apple made a similar decision a few weeks earlier. Market number 2 expects to sell only 220 million iPhones in the world. Despite releasing the iPhone 14s in September, Apple slashed its estimate by 20 million.