Samsung Has A Stuck Inventory Of 5 Crore Devices Due To Low Demand

South Korean tech major Samsung has 50 million or 5 crore devices stuck in its inventory waiting to be sold due to falling demand, says a report.

Earlier in May, Samsung cut its component orders from suppliers presumably in the wake of poor demand. Image: Getty

South Korean tech major Samsung has 50 million or 5 crore devices stuck in its inventory waiting to be sold due to falling demand, the media has reported. The Samsung stockpile of unsold devices includes majorly the mid-range Galaxy A series smartphones, according to a report by TheElec.

The tech giant is aiming to ship around 270 million units of smartphones this year and 50 million units is 18 per cent of that, the report added, citing sources familiar with the matter. In comparison, a healthy stockpile could have been around 10 per cent of the total units, but the current 18 per cent handsets stuck in inventory suggest Samsung is facing low demand.

Apart from falling demand, other reasons behind the massive stockpile of Samsung devices are the Covid-induced lockdowns in China, increasing cost of raw materials and the Russian invasion of Ukraine. It should be noted that earlier in May, Samsung cut its component orders from suppliers presumably in the wake of poor demand.

Meanwhile, earlier in March, the company, in an exclusive interview with ABP Live said that it was eyeing to capture a 40 per cent market share in India in the Rs 20,000-Rs 40,000 price segment in H1, 2022.

"First thing is that we want to catch 40 per cent market share and be the No. 1 in Rs 20K to Rs 40K price segment. The Galaxy A series devices will play a very very important role in that," Aditya Babbar, Senior Director and Head of Product Marketing, Samsung India told ABP Live.

Samsung Galaxy A series essentially includes devices in the mid-range, but some models also belong to the flagship entry-level bracket. The Galaxy A series also offers some features that Samsung's flagship Galaxy S series offers, but at a lower price point.

It should also be noted that the Galaxy A series was the most in-demand for Samsung last year and accounted for 59 per cent of Samsung's smartphone sales in the fourth quarter last year, according to Counterpoint Research.