Samsung’s entire mobile business seems to be in trouble and the Korean giant is currently investigating the cause of the sharply declining Galaxy S21 sales amplified by supply chain management problems. Perhaps Samsung ought to first investigate the possibility of adjusting the prices in comparison to competitors based in China.
It’s clear that Samsung’s upper management is dissatisfied with the mobile division’s performance. 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 an audit of the mobile industry as a whole is necessary. According to sources close to The Elec, supply chain management issues as well as the subpar earnings in the first half of 2021 prompted the need for the review. 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. For example, the S20 models sold less than 25 million units in the first six months, whereas models before the S10 sold more than 30 million units at the same time. The subpar performance of the 5G handheld market is another factor that the board of reviewers find troubling. 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 chipmaker, which supplies SoCs for Samsung’s Galaxy A series and other mid-range models, recently informed Samsung that it may not be able to fulfill all of the orders that are coming in. The chip shortages that were felt more strongly in the first months of 2021 and the unappealing prices that appear to be inflated in comparison to what Chinese competitors are offering for the same or even better quality are two additional potential causes of Samsung’s subpar mobile division performance.
