Why Samsung Is Making Less Phones Than Ever
Samsung, the top cell phone manufacturer and seller worldwide, is now making less phones than ever, here's why.
This article is more than 2 years old
Samsung has reported that it will reduce its intended phone manufacturing for 2022. The number of distributed phones will be 10% lower than Samsung expected for this year, and the reasoning is due to the ongoing conflict in Ukraine. The demand for cell phones has dropped due to the unrest in Eastern Europe’s effect on oil prices and the accelerating inflation rate in the United States.
At the beginning of the year, Samsung had an extensive amount of cell phones to manufacture and distribute. An estimated 310 million phones were supposed to be shipping by 2022’s end, but that figure has dropped significantly. Now, the cellphone provider expects to issue 280 million phones by the end of December. Samsung plans to reduce general production this May by 35%, then by another 10% later in 2022.
Inflation, astronomical interest rates, and geopolitical conflicts have affected more companies than just Samsung. Apple has also reported a reduction in its phone production, slashing its original estimate by 20 million. The tech company expects to distribute only 220 million phones by the end of 2022. Alongside the war in Ukraine, Apple also noted repeated COVID surges and supply chain issues as critical elements for its manufacturing curtailment.
Even with the abysmal state of the global economy, Samsung will still be producing more phones than it did in 2021. Last year, the cellphone provider shipped 270 million phones globally. With a new estimate of 280 million phones released by the end of the year, Samsung will still be selling 10 million more phones than it sold in 2021. This figure will also cement Samsung as the phone provider selling the most phones this year. Even though the company slashed its original manufacturing amount, Samsung would still come out on top as the premier phone provider in the nation and worldwide.
Over the past several years, cellphone purchasing has been slowly increasing. Companies distributed 1.35 billion phones last year, which was a 5.7% increase than they did in 202o. Amongst all providers, Samsung remained the top provider of cellphones globally, comprising 20% of the global phone distribution last year. Apple was right behind Samsung by about 40 million phones, distributing 235.7 million phones worldwide.
The third, fourth, and fifth place providers sold relatively fewer phones than Apple and Samsung last year. Xiaomi distributed 191 million, Oppo had 133.5 million, and Vivo made 128.3 million, more than 100 million phones shy of their cellphone company counterparts. Still, cellphone providers had a steady upward trajectory than in years prior, even with longstanding chip supply shortages.
Even though Samsung and Apple sold millions of phones worldwide, analysts believed that tech companies could’ve sold more if supply chain interruptions weren’t occurring. Chip shortages have plagued the tech industry since the pandemic, and it remains a problem in current tech manufacturing. Many phone companies have continued to distribute massive amounts of products despite the shortage, but it’s no secret that chip deficiencies have indented tech companies’ overall revenue. Though Samsung has reduced its phone distribution numbers for the next sixth months, it still remains one of the most prominent phone providers worldwide.
