Samsung Galaxy S8 expected to ship 60m units
Figure 1 - Mobile Handset Shipments - Source: SCMR LLC, Trendforce, IDC Last week we noted that Samsung Electronics’ supply chain had begun to receive orders for components to produce the upcoming Galaxy S8 flagship phone. Initial production was expected to be 10m units for the pre-release build but no full shipment targets were revealed. South Korean trade press has indicated however, that Samsung has set a shipment target of 60m units, 25% higher than the Galaxy S7 and 33% higher than the Galaxy S5 and S6. Samsung’s optimistic view, despite the phones later than normal release, comes at a time when the high-end smartphone market has seen slowing growth, particularly as the world’s largest smartphone market, China, is becoming saturated.
Samsung still dominates the smartphone market on a unit basis, with a 22% share[i], but local brands (20% share for top Chinese brands combined) are rapidly moving to capture share by producing lower-priced but fully featured smartphones, oriented toward mid-range price points, so it will take a unique combination of new physical and application characteristics to garner enough customer enthusiasm to offset the smartphone ennui that has overtaken the industry. Samsung also has to offset some potential reticence toward a new smartphone after the Note 7 issue, but we are always surprised at how fast consumers can forgive and forget if they see a shiny new device in the store window. Of course, the 60m target, even if true, is not set in stone, and production levels will likely be adjusted during 1H to meet customer demand, especially as Apple is expected to release its 10th anniversary iPhone later this year.
Samsung still dominates the smartphone market on a unit basis, with a 22% share[i], but local brands (20% share for top Chinese brands combined) are rapidly moving to capture share by producing lower-priced but fully featured smartphones, oriented toward mid-range price points, so it will take a unique combination of new physical and application characteristics to garner enough customer enthusiasm to offset the smartphone ennui that has overtaken the industry. Samsung also has to offset some potential reticence toward a new smartphone after the Note 7 issue, but we are always surprised at how fast consumers can forgive and forget if they see a shiny new device in the store window. Of course, the 60m target, even if true, is not set in stone, and production levels will likely be adjusted during 1H to meet customer demand, especially as Apple is expected to release its 10th anniversary iPhone later this year.
Figure 2 - Worldwide Smartphone Unit Shipment Share - 3Q '16 - Source: Trendforce
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