Samsung is reviewing its mobile division after sharp decline in handheld sales
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The Samsung higher-ups are clearly not pleased with the performance of the mobile division. We have seen quite a few reports presenting sharp declines for the Galaxy S21 sales this year, and now, The Elec informs that the Korean giant is already in the process of reviewing its mobile division management. This is not one of those periodic reviews performed every 4-5 years to evaluate the status of its many business divisions, but rather an emergency review performed without warning more akin to damage control. The review allegedly began in May and it should be finalized by the end of August. Samsung will then decide if the situation calls for an audit of the entire mobile business.
Sources close to The Elec claim that the need for the review was triggered not only by the lackluster earnings in the first half of 2021, but also by supply chain management problems. Samsung only managed to sell 13.5 million Galaxy S21 devices in 1H21, which is significantly lower compared to previous models, causing it to likely miss the initial sales target. The S20 models, for instance, saw ~25 million devices sold in the first 6 months, while models prior to the S10 used to see more than 30 millions units sold in the same time frame.
Another concerning aspect for the board of reviewers is presented by the subpar performance in the 5G handheld market. Despite being among the first companies to launch 5G smartphones back in 2019, Samsung has fallen behind three of its rivals. Strategy Analytics ranks Apple first with 29.8% 5G market share, followed by Oppo with 15.8%, and Vivo with 14.3%, while Samsung controls only 12.5%. On top of these problems, the collaboration with MediaTek is not on the best of terms. The Taiwanese chip maker is supplying SoCs for Samsung’s Galaxy A series and other mid-tier models, but recently notified Samsung that it might not be able to meet all the upcoming orders.
Some other possible causes for the subpar performance of Samsung’s mobile division could include the chip shortages that were felt more severely in the first months of 2021, as well as the unattractive prices that seem inflated compared to what Chinese-based competitors are offering for the same or even better quality.