After Dismal S20 Sales, Samsung Exercises Caution On Note 20 Parts

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Samsung is expecting Galaxy Note 20 series sales to be as dismal as its Galaxy S20. That's based on reports stemming from the tech giant's home region citing industry insiders. The supply chain insiders claim that Samsung has "become cautious" about ordering components for its Galaxy Note 20. Specifically for the Samsung Galaxy Note 20 5G.

The move comes in response to concerns about the ongoing global pandemic and its impact on sales, sources indicate. But also in response to an overall downturn in the smartphone market. In February, Samsung also blamed those for shortcomings on sales of the Samsung Galaxy S20 series. The flagship series has widely been reported as selling only around half as well as its predecessor.

The Galaxy Note 20 is going to be expensive, and that could hurt sales too

Aside from the prospects of attempting a wildly successful product launch amid a global pandemic, price also likely factors in here. Flagship smartphones have consistently risen in cost over the past couple of years. The Samsung Galaxy S20, for instance, started out at the budget end at $999. The Samsung Galaxy Note 20 will undoubtedly be more expensive.

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Yet another factor in Samsung's decline could also be global market competition from Huawei and others. Huawei, for its part, rose to overtake Samsung in April and May on Smartphone shipments. Further competition and increasing sales for the likes of OPPO, OnePlus, Xiaomi, and others are eating into its market share as well.

But, even where those types of analyses are concerned, the cost of devices is often cited as a cause for that challenge. Samsung could potentially respond by taking a loss or a lower margin on Galaxy Note 20 devices. But that seems unlikely at this juncture.

So it may turn out that Samsung Galaxy Note 20 series sales really will be as dismal as its S-series counterpart.

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If true, this is likely the best move for Samsung to make

With reports implying a real problem with back-stocked inventory on the Galaxy S20 series, Samsung cutting back on orders for the Galaxy Note 20 is the business-savvy decision. If sales do perform better than expected, Samsung is only going to create more demand. Limiting the number of devices available is a well-known tactic for achieving that. And more orders for components can always be placed later to pick up the slack.

Conversely, if it sells poorly, it won't have an overabundance of extra stock. That means taking fewer losses on inventory and discounted sales.