Samsung has decided to reduce smartphone production by more than 50 percent for one full month, according to a report today, with the normal output to be restored in May.
The reason is as simple as it could be: sales have declined substantially in the last few months, and given that Samsung produces more devices than it sells, reducing the output is the only way to go.
A report from The Elec indicates that Samsung wants to manufacture just 10 million smartphones this month, down from the normal monthly production capacity of 25 million handsets.
Existing inventory is more than enough
This is because Samsung also has unsold inventory ready to meet the demand should an increase be recorded, and the company anticipates that this could happen as soon as May. Until then, the production runs at reduced speed, which should allow Samsung to once again align the manufacturing with the demand worldwide.
“Logistics alone, it doesn’t make sense to churn out more than necessary,” someone familiar with Samsung’s plans was quoted as saying by the said source.
“Samsung Electronics plans to bring production volume back to normal in May after its plants in India and Brazil are normalized. But it may take longer than expected for things to get back on track,” other people familiar with the matter added.
Smartphone sales are already recovering in certain markets, with Apple selling more than 4 times more iPhones in China, according to unofficial data.
In the meantime, Samsung still wants to launch the Galaxy Note 20 in August as originally planned, although the company could very well switch to a digital event like everyone else. Of course, all plans can change overnight, but a physical event at this point seems to be rather unlikely.