Samsung's smartphone production takes a deep cut due to the coronavirus pandemic

Samsung's smartphone production takes a deep cut due to the coronavirus pandemic
The coronavirus pandemic is showing no signs of a slowdown, with the global grand total of confirmed cases breaking the 2 million barrier as of today and the death toll rapidly approaching the 150,000 mark, which continues to force a large chunk of the world's population to hunker down and take extreme social distancing measures.

In addition to the public health, that makes COVID-19 a major economic threat, critically impacting a wide array of previously prosperous industries and businesses. Because people are less inclined to buy non-essential products when their job safety is directly or indirectly endangered, sales of things like smartphones, tablets, and wearable devices are expected to take a big hit this year.

The world's largest smartphone market has already seen a massive decline in both demand and production throughout the year's first quarter, and starting last month, similar effects of the pandemic have been reported... pretty much everywhere else. No handset vendor, no matter how big or small, will be spared by this unforeseen recession, although certain companies may have more to suffer than others.

Samsung, for instance, emerged essentially unscathed from the deluge of Chinese factory shutdowns of January and February, suffering more as the deadly virus began to wreak havoc on countries like Brazil and India. The world's number one handset maker is now looking at heavily reduced output in April due to those factory closures, as well as a predictable decline in global demand.

Things are bad


In case you were wondering exactly how bad things are getting for a tech giant like Samsung, the answer comes from Korean media (where else?), which currently points to a reduction of around 60 percent in overall smartphone production for April 2020 compared to the company's "previous monthly average."


Specifically, Samsung reportedly plans to manufacture just 10 million smartphones this month, down from 25 million units for a "normal" month. Of course, handset production doesn't line up perfectly with actual shipments to end users, and the company could manage to sell more than the aforementioned 10 million units in April, also relying on leftover inventory from March, when the coronavirus pandemic started to impact Samsung's global numbers.

Still, you only have to look at the popularity (or lack thereof) of the ultra-high-end Galaxy S20 family to tell April is going to be a really tough month for Samsung. Obviously, the industry as a whole is bleeding, and full-year forecasts are getting bleaker and bleaker as time goes by and the road to a COVID-19 vaccine remains long and bumpy.

Could things get even worse?


That, our friends, is the million-dollar question, but alas, no tech analyst, medical expert, or overly optimistic US President can supply a definitive answer just yet. Clearly, the pandemic could go on for at least a little while longer, keeping factories closed and most people sheltered in place, but at the same time, everyone is hoping we'll be able to gradually get on with our lives... one way or another soon.


Samsung's execs are among those hopeful of a relatively speedy rebound, planning (at least for the time being) to "bring production volume back to normal in May." Naturally, for that to happen, the company's plants in Brazil and India will need to open their doors again and return to normal activity, which is by no means guaranteed, while consumer demand also has to show some kind of an encouraging sign, which seems highly unlikely.

The overall smartphone market could continue to decline through June, with sales expected to pick up during Q3, although that's far from guaranteed as well and contingent on many incredibly volatile factors that have little to do with the mobile industry itself.

FEATURED VIDEO

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.
FCC OKs Cingular's purchase of AT&T Wireless