The current Coronavirus pandemic (COVID-19) has hit the smartphone industry hard. With the world coming to a halt following the COVID-19 outbreak, there has been a sharp decline in smartphone demand. Now, it seems the world's largest smartphone vendor Samsung is having to make some tough calls owing to that fall in demand.
According to a report from the South Korean news portal The Elec, Samsung has cut down smartphone production in April by about 60 percent. The company usually manufactures more than 300 million smartphone units every year. That's a monthly average of 25 million units.
However, this month, the South Korean giant will reportedly produce only 10 million smartphones. The report cites Samsung’s suppliers as the source of information.
Samsung cuts down smartphone production in April
Samsung produces a bulk of smartphones in the first quarter of the year. The company then places further orders in April according to the demand. So it usually produces fewer smartphones in April as compared to the overall monthly average. However, the number will be even lower in April 2020.
Since not many people are buying phones in this time of financial uncertainty, Samsung would still have quite a bit of inventory left over from its March production. So, it makes sense for the company to not manufacture a lot more units until the demand surges back again.
Samsung's smartphone factories in India and Brazil have been shut down. Both countries are in lockdown as the number of COVID-19 cases continues to rise. The Indian government recently extended the nationwide lockdown until May 3. The Korean company's manufacturing plants in several other countries have also been shut down, while some are operating at lesser capacity.
Companies like Apple and Huawei, on the other hand, are getting ready to resume production soon. These companies have their main production units in China, the epicenter of the Coronavirus pandemic. And since COVID-19 is almost under control in China, industries are expected to resume operations soon.
Samsung, meanwhile, plans to ramp up smartphone production starting next month, that's if things improve in India and Brazil by then. The smartphone giant is still hopeful of launching the Galaxy Note 20 and the Galaxy Fold 2 in its original schedule in August.
Market watchers expect smartphone demand to hit rock bottom in the second quarter of this year. The demand will start rising in the third quarter, with the market finally getting back to normal in Q4 2020. Overall, global smartphone shipments are expected to fall more than 10 percent this year.