Galaxy S4 Sales Expectation Decline & Supply Chain Fluctuates
Samsung’s rivals would be happy when hearing this news. Recently, different analysts and firms calm down from the surging of Samsung’s high-end smartphone sale, begin to revise down the sale volume of Galaxy S4:
South Korea-based Woori Investment Security first downgraded Samsung’s earnings estimation and target price on June 5;
Bank of America Merrill Lynch lowered the sales expectation of Galaxy S4 this year to 65 million units;
A lot of analysts down Galaxy S4 shipments forecast to about 7 million units a month, decreasing 3 million units
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After Apple was trapped by a series of negative news (such as PRISM, lower after-sale service toward Chinese iPhone users…), Samsung become the largest winner whether in revenue or growth. But the ignored fact breaks through confused representation and come out: high-end smartphone market is moving toward saturation.
The causes include the following:
High-end cellphone market has experience 5 years of rapid development since Apple first introduced iphone in 2007;
With more manufacturers such as Sony, HTC, Huawei and Lenovo introducing high-end smartphones, the market capacity reduces again;
Other factors also address the high price and the resulting relative slow replacement.
How supply chain change
For manufacturers, Apple plays a role of savior. In 2012, when the global semiconductor industry struggled in the weak economic situation, Apple’s introducing of iPhone5 brought hope to such semiconductor manufacturers as Broadcom, Elpida and SK Hynix. The gradual saturation of high-end smartphone segment will also affect the shipments of Apple iPhone, further reducing demand for high-end component.
Although Samsung, another large high-end smartphone supplier, relies more on internal supply of components (including processor, display and memory chip), the saturation of high-end handset segment makes it turn to focus more on mid and low-end phone market, which leads to its larger parts demand. It is reported Samsung is snatching Apple’s component suppliers such as Sharp and SK Hynix.
And with Apple and Samsung participating in mid and low-end smartphone market, components used in mid-end phone will see price cutting and larger demand. For consumers, this is good news, for they can get access to these smartphones at a lower price.
How to shore up high-end market
When a market gets saturated, replacement will usually be the main contributor to continuous growth. In fact, there show no outstanding and revolutionary bright spots in Samsung’s Galaxy S4 and Apple’s iPhone5, which is the one of the reason why analyst declined Galaxy S4 sales expectation.
So, not only consumers but also manufacturers long for the revolutionary change in mobile devices. Market needs such storm clouts as the application of touch screen, smartphone replacing feature phone and the first iPad. Of course, this goal has a long way to be achieved; but maybe, voice-recognition-like effect can be within reach?