Earlier this month we passed along a report from Reuters stating that smartphone production at Samsung’s Vietnam factories, which are responsible for half of the company’s annual phone production, had been curtailed sharply. Samsung continues to lead the world in smartphone shipments but according to TheElec, it has dropped its target for 2022 and now plans to deliver 260 million units down 13.3% from its earlier estimate of 300 million units.
The report added that Samsung originally planned to build 334 million smartphones this year and ship 300 million of them. Out of the 334 million units scheduled for production, 284 million handsets were set to roll off of Samsung’s own assembly lines with 50 million being produced by its China-based contract manufacturers. But after taking the headwinds into account such as supply chain issues (like the chip shortage and a shortage in experienced workers), inflation, and the drop-off in demand for smartphones, Samsung reportedly has cut production plans.
TheElec says that between October and November, Samsung plans on building only 34 million smartphone units in its own factories. It says that this would be a huge decline compared to the same time period in previous years.
Sammy’s Galaxy A line (like the A53 pictured here) has big screens, large batteries, and viable cameras
Last year, the South Korean manufacturer shipped approximately 270 million units, so if Sammy does deliver 260 million handsets, it would be a 3.7% decline on an annual basis. It also could give Apple a chance to close the gap with Samsung. Last year, Apple delivered 235 million iPhone units and this year the iPhone 13 line has been selling well with the iPhone 14 series to be unveiled possibly inside three weeks.
During the second quarter of 2022, Canalys reported a 9% year-over-year decline in smartphone shipments. Samsung still had the highest market share in the industry at 21% thanks to its mid-range Galaxy A product line. More affordably priced than its premium handsets, the Galaxy A models have big screens, viable cameras, and huge batteries. Apple was next with a 17% slice of the global smartphone pie followed by Xiaomi (14%), Oppo (10%), and Vivo (9%).
If Samsung does see its smartphone shipments decline to 260 million units, it would be its lowest annual total since the pandemic reduced 2020 deliveries to 253 million. The year before, it had shipped 296.5 million smartphones.
