An industry source has said that Samsung will probably not be able to achieve its annual smartphone shipment target of 350 million units. This is because of the lower-than-expected sales of its latest flagship Galaxy S9 and Galaxy S9 Plus, among other factors.
Samsung Initially Aimed to Ship 320 Million Smartphone Units in 2018 – Increased to 350 After Receiving High Pre-Order Counts for the Galaxy S9 Galaxy S9 Plus
Samsung’s smartphone sales momentum has recently seen a slowdown in China, which is one of the reasons why the company will not be able to achieve its aforementioned target. In fact, both the Korean giant and Apple have been struggling with lower smartphone demand in recent years because of high market penetration and increasing competition from Chinese manufacturers who make affordable, but premium handsets.
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Samsung’s target of shipping 350 million units is higher than its actual shipment figure over the past years. The research firm Strategy Analytics has reported that Samsung shipped 319.7 million, 309.4 million, and 319.8 million units in 2015, 2016, and 2017 respectively. In the first quarter of 2018, 78 million handsets were shipped. An analyst from HMC Investment Securities has predicted that the company’s smartphone shipment in Q2 will be around 73 million and further stated that the Galaxy S9 and Galaxy S9 Plus are likely to underperform.
Even though the sales of the Galaxy S9 were stable during the first quarter, the phone underperformed in the second quarter. Its overall annual sales touched 30 million, which is the lowest figure ever recorded for a Galaxy S series flagship phone since 2012. The lackluster sales will impact the overall performance of the mobile division, though it is said that the Galaxy Note 9 release will help to revive some of the losses.
Korea Investment Securities and Shinhan Investment have predicted the smartphone unit to bring in an operating profit of 2.3 trillion won ($2.07 billion USD approximately), which is 43.3 percent lower than that of last year while EBEST Investment Securities have forecasted an operating profit of 2.25 trillion won ($2.024 billion USD approximately).
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The increasing pressure has reportedly made the CEO of the mobile division, Koh Dong-jin ask the sales and marketing team to take measures to boost sales. Samsung’s market share in China is down from 20 percent in 2013 to just 1 percent in 2017.
Samsung will be counting on its upcoming foldable smartphone to perk up sales in the future. Some critics have pointed out that the foldable smartphone will probably be too expensive to lure a large number of buyers to purchase it and may not be able to improve profits for the Korean giant.
Source: The Investor
