Smartphone demand would plummet during the next few quarters keeping in view the shattering effect of the coronavirus pandemic across all countries. The crisis has not only impacted the health of people but has also created the most turbulent times for the economies worldwide.
With everything under a cease, it is challenging for consumer goods and luxury items to find their old glory and demand.
Samsung cuts component’s orders by 50 percent
Samsung, one of the largest manufacturers of smartphones in the world, has seen an excellent first quarter with the sales being high; however, the second quarter will be murkier. Thus, the company is looking to cut down manufacturing.
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Tough times ahead
Samsung’s flagship smartphone was rolled out just a few months before the release. However, the Covid-19 crisis has made the company to close its units in south Asian countries of India and South Korea. The supply chains of the company have been profoundly affected due to the global pandemic. With the manufacturing been stopped, the demand for components is also down. This has made Samsung cut down the orders of the parts to 50 percent.
Lack of demand for luxury phones
The demand for smartphones has gone down massively as people are stuck at home. The shops and sales points are shut; online delivery platforms are functionless. Thus there is no business at all for the smartphone maker.
Manufacturing volumes to decrease
In such a scenario, the smartphone giant decided to cut off the component’s orders. The company makes more than 300 million phones per year for various price ranges and models. Now since the orders are cut down, the manufacturing will also be impacted.
Components makers are worst hit
In such a case, the mobile phone components makers will be hit the most. The companies that supply the components to the smartphone makers have, in a way, called the situation as Death Sentence as it is affecting them severely.
The company has cut the orders for the components like camera, speakers display units which are manufactured two to three months in advance before the rollout of the final product. Since the company is already cutting down the orders, it shows that the smartphone maker is projecting decreased sales in the future. Even the distribution network is also severely hit, the company sees an overall challenging situation in resurrecting its sales.