The pandemic caused by the Covid-19 virus has now begun to leave behind all the countries of the world. Although the chip crisis has caused disruptions in the supply chain, production is increasing day by day. However, Samsung is also increasing the sales of its flagship smartphones. However, when we look at the ratio to all sold devices, the gap has widened so much that it is no longer closed.
Only 10 percent of Samsung’s sales are for flagship devices!
According to data released by Samsung, it managed to increase its revenue by 18 percent and operating profit by 51 percent in the first quarter of 2022 compared to the first quarter of last year. It also achieved revenue of KRW 77.8 trillion ($61.19 billion) and operating profit of KRW 14.12 trillion ($11.10 billion).
Chip production accounts for 8.5 trillion KRW of this revenue, and smartphone market for 3.82 trillion KRW. In addition, many different products are sold from tablets to smart watches, from headphones to televisions and white goods.
The main issue that attracted attention was that although it sold much more smartphones than Apple, its profit margin was low due to its low profit margin. Because Samsung managed to sell more than 300 million phones last year.
However, only about 10 percent of these sales made by Samsung are flagship devices. For example, the company sold 7.2 million Galaxy S22 series models in the first quarter of this year. If we hit the full year, it is expected to reach 30 million sales.
When we look at the past years, the sales of the Galaxy S10 series before the pandemic had exceeded 40 million units. But right after, Galaxy S20 models could only reach 20 million sales. Of course, this rate increased as the number of Covid cases decreased.
Therefore, the Galaxy S21 series reached a rate close to 25 million. However, even if this situation will continue in a positive way, the S10 will not be able to achieve its success for the next 2 years. Moreover, such a goal may no longer exist.
Because a part of the company’s 300 million sales, which is not even 10 percent, represents the premium segment. On the other hand, foldable phones may achieve unexpected success in the coming years.
Again, when we look at the first quarter data of 2022, Z Flip 3 and Z Fold 3 folding smartphones managed to sell 2 million units all over the world. Therefore, if it is a good year and supported by new models such as Flip 4, it can easily reach 10 million units. This may allow it to close the gap in the flagship class.
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