Samsung Electronics Reduces Parts Inventory for the First Time in Its Smartphone-Making History
According to the industry on the 19th, the Wireless Business Division at Samsung Electronics is planning to reduce the monthly production of Galaxy S4 by 10 to 15% and retire Galaxy S3 sooner than planned.
The July order for Galaxy S4 parts is for 6.5 million handsets, which is only about a half of the same order placed for May. The parts procured for Galaxy S4 had been climbing the chart in April (for 10 million handsets) and May (for 1.2 million handsets), but the trend moved downward in June.
Samsung Electronics had been oozing confidence until just recently about Galaxy S4. Jongkyun Shin, the president of Samsung Electronics, had asserted to the press that ‘there is no problem’ with regards to a JP Morgan report that expressed concern on sluggish sales of Galaxy S4. However, a warning light started to blink this month in Samsung’s supply chain management, as the gap between Galaxy S4s sold in the market and the parts inventory started to widen.
Samsung Electronics determined that raising the smartphone market share with only Galaxy S4 is no longer a viable option, and plans to launch a range of models from Galaxy Note III to Galaxy S4 Mini and to Galaxy S4 Zoom. Also, the company plans to discontinue the models with low sales performance to focus the resources to more popular models.
The July order for Galaxy S4 parts is for 6.5 million handsets, which is only about a half of the same order placed for May. The parts procured for Galaxy S4 had been climbing the chart in April (for 10 million handsets) and May (for 1.2 million handsets), but the trend moved downward in June.
Samsung Electronics had been oozing confidence until just recently about Galaxy S4. Jongkyun Shin, the president of Samsung Electronics, had asserted to the press that ‘there is no problem’ with regards to a JP Morgan report that expressed concern on sluggish sales of Galaxy S4. However, a warning light started to blink this month in Samsung’s supply chain management, as the gap between Galaxy S4s sold in the market and the parts inventory started to widen.
Samsung Electronics determined that raising the smartphone market share with only Galaxy S4 is no longer a viable option, and plans to launch a range of models from Galaxy Note III to Galaxy S4 Mini and to Galaxy S4 Zoom. Also, the company plans to discontinue the models with low sales performance to focus the resources to more popular models.
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