Samsung is going to cut its smartphone production for 2022

We all know we can’t escape the cycle of buying new smartphones every few years, even though our current phones work perfectly fine. But if a new report is correct, Samsung thinks it’s possible that the smartphone may be losing its allure to consumers. And if Samsung believes it, then maybe there’s something to it, right? According to South Korean publication Business Korea, the company has lowered its production for next year because of a lack of demand for new phones. The report claims that Samsung will cut production by 12% on its flagship Galaxy S series and by up to 25% on its mid-range Galaxy A series 5G phones. This is a concerning sign for the future of smartphones but not all that surprising. Although the next few years will bring some important phone innovations like rollable displays and foldable screens, it doesn’t appear as though these will be enough to really incentivize consumers to upgrade from their current models.

Samsung, one of the largest smartphone maker in the world, is cutting production on its next phones.

Samsung, one of the largest smartphone makers in the world, is cutting production on its next phones. The company’s display division has seen a slowdown in demand for displays as well.

Samsung Display has yet to see any signs of an uptick in demand and it’s expected that its revenue will drop by 15% this year. Samsung Electronics’ overall third-quarter operating profit fell 35% year-on-year as inventories grew at its smartphone business and margins declined due to weaker chip prices.

The report claims that Samsung will cut production by 12% on its flagship Galaxy S22 series and by up to 25% on its mid-range Galaxy A52 5G phone.

Samsung is reportedly cutting production on its next phone.

The South Korean giant will reportedly cut production by 12% on its flagship Galaxy S22 series and by up to 25% on its mid-range Galaxy A52 5G phone, which was introduced at MWC 2019 earlier this year.

This week, Samsung announced that it was not going to release a new version of its Note smartphone in 2020 after the launch of the Note 10 Pro and Note 10 Plus last fall. Rumors have suggested that this decision could be related to Apple’s legal battle with Qualcomm over patent royalties and how much power Samsung has over Qualcomm’s chip business as a result of their supply agreement with Apple.

This is a concerning sign for the future of smartphones but not all that surprising.

The smartphone market has been shrinking for years, and it’s not expected to change anytime soon. According to IDC, global smartphone shipments will decline by 6% this year compared with 2018. More than that, smartphones sales have been declining consistently since 2016—a year in which they fell by 3%.

The reason for this decline is relatively simple: phones are getting better while prices stay largely the same. Smartphone screens are getting bigger and brighter every year; processors are faster and cheaper; cameras can capture more detail; batteries last longer than ever before; wireless charging has become common; and so on. In short, there isn’t much room left for improvement over time unless you buy an expensive flagship phone like the Galaxy S10 or iPhone XS Max—but even then you won’t get much more than just a few extra features like ultra-wide angle lenses or curved screens at best (and those cost hundreds more).

Although the next few years will bring some important phone innovations like rollable displays and foldable screens, it doesn’t appear as though these will be enough to really incentivize consumers to upgrade from their current models.

It’s not as though these innovations will be enough to motivate consumers to upgrade, though. Even if Samsung manages to introduce a foldable phone with a rollable display (and I don’t believe it will), the utility of those features is still up in the air. It’s unclear how much more people would pay for such an innovative design or what kind of additional life cycle it would have compared to current models. I doubt many people will be willing to pay a premium for these kinds of innovations when they can get similar ones from other manufacturers at lower cost and still have access to all their favorite apps and services on iOS or Android phones via iOS/Android app stores.

The report also mentions that Samsung’s display division has yet to see any signs of an uptick despite being one of the company’s biggest earners.

This is particularly troubling given that it’s been more than a year since Apple showed off a new iPhone with an OLED display, which could have helped boost demand for panel components across the industry.

Conclusion

The good news is that even if phones aren’t selling as well, there are still plenty of innovations to look forward to. In the meantime, we can all enjoy adding extra time onto our contracts by not having to buy as many new phones.