The COVID-19 pandemic and global chip shortages have wreaked havoc on the smartphone market for the better part of the past two years, and things don't look like they'll be any better this year. According to a new report, Samsung plans to produce fewer phones than it originally planned.
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Citing a source in Samsung’s supply chain, South Korean business newspaper Maeil Business News reports that the tech giant has significantly reduced its smartphone production for this year. Samsung has reportedly informed suppliers that it plans to reduce its order volume by mid-2022, meaning that the company plans to ship only 280 million units this year. The source said that’s 30 million less than the original target of 310 million units.
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Analysts at Shinhan Investment told the news agency that Samsung will cut production by 35% in May.
According to the report, the main reasons for the decline in production are high inflation and the ongoing military conflict in Ukraine . In particular, Russia 's invasion of Ukraine is expected to negatively affect the country 's phone market this year , Counterpoint Research says.
Samsung's lower target is yet another sign of a growing trend among phone makers to brace for the potential impact of a worsening global economy. Most recently, Apple was reported to be producing only 220 million iPhones this year, compared to a market forecast of around 240 million units.
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However, while Apple 's production cuts only apply to its flagship phones, Samsung's move will affect phones across multiple lines . This includes budget models as well as many of Samsung's best phones due out later this year, like the upcoming successors to the Galaxy Z Fold 3 and Z Flip 3 .
The latest report shows that even the world's largest smartphone manufacturers are not immune to these kinds of problems.
Information source: androidcentral.com
