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Everyone is affected by the growing inflation. This, of course, extends to businesses relying on customers in various markets. Although big companies are not experiencing the impacts in ridiculously big waves, they have to make some adjustments as the demand in the market changes. One of them is Samsung, which recently decided to reduce its order volume of smartphones this 2022. From its original target of 310 million units, the order is now slashed to 280 million units, according to the statement given by a Samsung Electronics partner company official to the business and economic portal site South Korea’s Maeil Business News.
This action from Samsung follows the decision of the same tech company Apple to cut down the production of its low- to mid-end devices, particularly the production of the iPhone SE (2022) by 20 percent. Samsung, on the other hand, seems to be making production adjustments to its wide range of devices, including those that belong to its premium lines.
Two of the main reasons cited for the actions taken by the company are the high global prices and the ongoing war between Russia and Ukraine. These factors are the primary reasons that could lead to the expected sluggish sales of mid- to low-priced products compared to last year. Further, during its first-quarter earnings announcement last month, Samsung Electronics noted that the smartphone market had just entered the off-season. The company predicted at that time that the smartphone market would flourish in the second half of 2022. Still, the situation between Russia and Ukraine and the rising inflation seem to prove otherwise. With this, Samsung needs to make these necessary adjustments in its expectations and production. A Samsung Electronics official even told South Korea’s Maeil Business News that making an official position is difficult for the company as it needs to monitor the market situation.
Unfortunately, these changes will significantly affect Samsung Electronics’ parts makers after the company changed its supply amount order by up to one month. Together with Apple’s recent move, this will also affect the annual sales of the smartphone market with 1.4 billion unit sales.