Samsung Smartphone Shipment Expectations Decline
We have noted that expectations for Samsung Electronics’ (005930.KS) smartphone shipments have been declining as the company pulled back orders from component suppliers and OEMs. Expectations for Samsung’s own smartphone production have also declined from the initial plan to produce 333m units, while shipping almost 300m, to shipping 260m units, less than the number shipped last year, although still better than 2020 when only 250m were shipped, according to South Korean press, although our 2020 number of 257.6 is a bit higher.
Samsung had expected to ship 60m units in the 1st quarter, and met that goal, but fell short of the 53m it expected in 2Q, shipping 48m units. 3Q internal expectations were for 47m units, and expectations are for 46m, which is expected to be met. Samsung has yet to set a target for 4Q shipments, particularly as they will begin to produce phones for the Galaxy S23 to be released in 2023, but looking at just October/November expectations of 30m units, production estimates seem to be falling below last year’s total, although we see less of a shortfall (-2.8%) than others as we build in ~20m units for December production.
Actual total units shipped will also include OEM units and channel inventory from 2021, but we expect that Samsung has cut back OEMs even more than it has cut back its own smartphone production as we expect internal margins are higher than those from OEMs. All in, macro issues have affected almost all smartphone brands, with Apple (AAPL) expected to be the only major brand seeing growth this year, but we expect even iPhone shipments felt the sting of weak consumer confidence as we entered 3Q, which means the iPhone 14 needs to be enough to give consumers a reason to upgrade. It is going to be a difficult 2H for all smartphone brands, with Apple still at risk for a bit of disappointment in 4Q in our view.
Samsung had expected to ship 60m units in the 1st quarter, and met that goal, but fell short of the 53m it expected in 2Q, shipping 48m units. 3Q internal expectations were for 47m units, and expectations are for 46m, which is expected to be met. Samsung has yet to set a target for 4Q shipments, particularly as they will begin to produce phones for the Galaxy S23 to be released in 2023, but looking at just October/November expectations of 30m units, production estimates seem to be falling below last year’s total, although we see less of a shortfall (-2.8%) than others as we build in ~20m units for December production.
Actual total units shipped will also include OEM units and channel inventory from 2021, but we expect that Samsung has cut back OEMs even more than it has cut back its own smartphone production as we expect internal margins are higher than those from OEMs. All in, macro issues have affected almost all smartphone brands, with Apple (AAPL) expected to be the only major brand seeing growth this year, but we expect even iPhone shipments felt the sting of weak consumer confidence as we entered 3Q, which means the iPhone 14 needs to be enough to give consumers a reason to upgrade. It is going to be a difficult 2H for all smartphone brands, with Apple still at risk for a bit of disappointment in 4Q in our view.
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