Friday, June 21, 2013

Galaxy S4 Production Cut; Galaxy S3 to Retire

 Business reports have been suggesting this for quite some time, but nobody was ready to throw in the towel just yet. ZDnet was the first to post about this and their report confirms our suspicions. So, the short story is this: Samsung is going to retire their Galaxy S3 model and cut the production of their latest flagship device. However, that doesn't make any sense right now - so why is Sammy doing this? Well, let us try get down to the bottom of the answer!

Galaxy S4 Production Cut

 The report comes from a Korean publication - ET News - who have insight in the South Korean electronics market. According to them Samsung is going to stat their latest program/plan in order to reduce their inventory and stop the production of older models. From what we knew already, the monthly production levels of the Galaxy S4 were rather high, but it is expected that it will be reduced by 10 - 15 percent! That's a really major production cut and it seems that the S4 wasn't such an amazing success as we first thought.

 Next, the report says that it is not just the production that is falling behind, but obviously the demand for the product. This of course makes complete sense, if the demand for the product is low, Samsung will obviously have to cut the production. One could say that they could try and push the device more, but honestly Samsung has already used every single marketing trick ever invented!

Galaxy S4 sales drop
There are too many parts in Samsung inventory...
 Once there was a shortage of Galaxy S4 device, but these days are now long gone. The July Galaxy S4 order is currently only 6.5 million handsets, which is only half of the S4 units Samsung sold last month. The month before that was even more successful which just illustrated Samsung's slow fall. However, this is nothing overly exciting and it is something that was to be expected. After all, technology advances at a very fast rate and we can't expect a single device to rule over the market for an entire year.

 However, JP Morgan cited poor European consumer demand as the reason for lower-than-expected shipment rates. If the market in Europe was more open to Samsung's flagship device then perhaps things would have been much better. 

 Also, in the report it is stated that the Samsung Galaxy S3 will be pulled off the production line which came much sooner than expected. To combat these events, Samsung will have to think of a new strategy to once again completely dominate the market. We can expect this sooner rather than later as Samsung is preparing three new devices: Galaxy S4 Mini, Galaxy S4 Zoom and the Galaxy Note 3.

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