Samsung reportedly cutting Galaxy S4 production, S3 going in early retirement

By , Jun 21, 2013

A model poses with Galaxy Note of Samsung Electronics during a local launch event for Samsung's mobile devices at the company's headquarters in Seoul

The unstoppable advance of Samsung may have hit a bump in the road. A report from South Korean claims the Apple smartphone rival plans to reduce production of its just-released Galaxy S4 by 10-15 percent, while sending the S3 to an early retirement.

The South Korean-based firm also believes the flagship Galaxy S4 won’t be able to increase its share of the smartphone market alone, requiring a range of new models to do the job, the Thursday report claimed…

Earlier this month, Samsung’s share price fell by six percent following a JP Morgan note that Galaxy S4 orders had fallen by up to thirty percent. The news instantly erased an astounding $12 billion in Samsung market cap as investors hit the ejection handle.

Samsung has poured billions into its marketing efforts, positioning the huge corporate conglomerate as an underdog competing with the well-oiled image machine of Apple.

Are we seeing the first signs that – like Apple – Samsung is subject to the vagaries of all companies, including overzealous analysts?

Samsung Electronics president Jongkyun Shin dismissed the earlier JP Morgan report, telling reporters “there is no problem” with Galaxy S4 sales.

The Korea IT News begs to differ:

However, a warning light started to blink this month in Samsung’s supply chain management, as the gap between Galaxy S4s sold in the market and the parts inventory started to widen.

July orders for Galaxy S4 parts is for 6.5 million smartphones – about half the number of orders placed in May, claims the site. After a two-month period from April to May, there’s been a downward trend in parts orders.

To support flagging sales of the Galaxy S4 – which reportedly are not strong enough to boost Samsung’s smartphone share alone – the company just introduced a range of Galaxy-branded gear, including the new Galaxy S4 Mini, coming in July and pictured below.

Galaxy S4 Mini (three-up, black)

Other devices unveiled at a London event yesterday include the ATIV Q convertible which dual-boots Windows 8 and Android, the Galaxy S4 Zoom smartphone/camera hybrid  and a brand new Galaxy NX interchangeable lens camera with a 4.8-inch touch screen.

Additionally, the Galaxy S3 will be given early retirement as part of Samsung’s plan to drop low-selling models to concentrate on more popular – and presumably more profitable – products.

Here’s the Galaxy S4 Zoom.

There are a number of similarities with Samsung’s current troubles and the rough waters Apple has had to navigate. Like Samsung’s leader, Apple CEO Tim Cook quickly responded to analyst claims of dropping iPhone orders by announcing all is well.

The world of FUD also has a tendency to feed on itself with negative analyst reports prompting sliding stock prices and seemingly confirming the original dire forecasts – which starts the cycle all over again.

Did Samsung think it was immune to this sort of pump-and-dump behavior?

Build the company up as invincible, attracting stock buys. Then pass on rumors of trouble, attracting stock sells.

Who wins?

The investment banks which charge fees on all stock action.

The analysts who grab headlines by adding ‘Apple’ or ‘Samsung’ to their press releases. The whip-sawed investor or the under siege tech companies?

They’re just collateral damage.

Samsung Experience Shops at Best Buy (teaser 002)

Beyond the numbers, Samsung’s reported plan to dump the aging Galaxy S3 and other less-profitable handsets only makes sense. The opportunity for growth through sales of high-end smartphones is increasingly limited.

Earlier this week, we reported in China nearly 50 percent of Samsung’s smartphone sales are in the sub $200 handsets. Apple also recognized this shift, putting increased resources into development flexible payment options for India, China and other developing nations.

IDC 20130620 (China mobile phone market forecast by screen size)

The iPhone 4 has become the introductory Apple smartphone for the low-end consumer, saving it also from retirement. Just the latest reason for our repeated urging that readers look beyond the sheer numbers for the real story of today smart device landscape.

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  • Falk M.

    Good Lord, that image needs to die already.
    I mean, the chick is hot, but she looks really forced to smile and the phones appearing that much bigger than her head certainly doesn’t help things.

    • Bobby McBobson

      Well she doesn’t look happy… That’s understandable. She wants to hold iPhones, not Samsungs. It’s weird, I see that same picture all the time in Samsung ads.

      • Isa Altintas

        This is the most stupid post I’ve red in a while.

      • Gorgonphone

        i thought it was a great post…lolo

      • Bobby McBobson

        ok. well if u look closely at her face, you will see that she is not smiling. And it’s ”the stupidest” not ”the most stupid”.

      • MarcPhilippeB

        it was a joke, brainiac.

      • Isa Altintas

        Thanks for reminding, what should I’ve done without you letting me know..

      • MarcPhilippeB

        post further nonsense.

      • Gorgonphone

        i agree

  • felixtaf

    Too much of anything is good for nothing… You flood the market with too many phones and this is what will happen…

    • mehrab

      And too much nonsense advertising

    • Jay Kay

      Why too many devices why not just couple of them and thats it, they wanted to fill real galaxy with these cheap plastic galaxies.

      • felixtaf

        I appreciate Samsung’s effort to release a Phone in different price range.. But thats not the point, even S3 Mini was selling for ~400$. Ridiculous S4 Zoom and the new camera they announced ystrday with android are pointless.. “There are more than 150 Galaxy devices released so far”..

      • MarcPhilippeB

        true, that’s absolutely no innovation, just putting two things togehter. no brain work at all.

      • Guest

        Let me guess, you probably think Apple DOES innovate.

    • Yash Gorana

      Yeah. We are enjoying the iPhone 5 for atleast a year. These guys just release it few months ago !

  • millwork help

    People just waiting for the note 3… And can you stop embedding tweets… Christians not writing this article so his opinion doesn’t need to be in it…

    • Falk M.

      I disagree that the staff’s opinions shouldn’t be featured if the particular person isn’t publishing the blog entry, but I do agree that those tweets are kinda annoying (might be just us though).
      To me it seems as if the staff didn’t communicate amongst each other and had to refer to everyone’s opinions via Twitter instead of talking to each other.
      I know this isn’t the case probably, but it seems as if you had no conferencing, briefing or communication of any sorts going on.

    • felixtaf

      Note series and S series are two different lineups with different fans… Not every S3 owner is going to update to Note 3. Coz note 3 will be >5.5″ and thats too big for an ordinary user.
      Regarding tweets, nothing wrong in that. Its far better then Christian including his own tweet in his own blogpost to support his post… Quoting someones tweet to support your article is not that bad…

    • Gorgonphone

      lol @ note3… more samsnung BS.. big ugly cheap plastic phone

      • millwork help

        Thank you for contributing…

    • Saeed Ghattas

      I thought that the s4 is suppose to be new and people waited for it. Samsung is all lies :) oh, and bigger screens that won’t fit your head.

  • Don’t wannatell

    Galaxy S 4 has nothing better than S3. It just has some useless features which are also available in other product, such Optimus G Pro. However, it is kind of quick that Samsung cuts production now, they at least should wait for iPhone 5S/6 to come and kick their ass. And talking about 8 cores is S4, it is just ridiculous.

    • Gorgonphone

      the iPhone 5 killed the S4 and the 5S will kill anything else silly samsung makes..

    • Zeljko Nikolic

      open up two apps at once…try it with your iphone

      • BoardDWorld

        That would have to be one of the most pointless un-compelling points put forward by any post I have read to date…

      • Don’t wannatell

        I hope you do that everyday. You know what? 2 Apps are possible for iPhone, Music or call with other apps. However, it does not show two popup windows at the same time coz it is just useless to do that on a phone. It’s gonna hurt my eyes. Enjoy your plastic. :D

  • Gorgonphone

    lololol sad the S4 has failed so what does samsung do??? flood the market with more cheap crappy android POS phones..lol

    • Zeljko Nikolic

      it is a success

  • n0ahcruz3

    S4 is a Nice phone. There are certain factors that affecting the sales of this phone over saturation and people are holding on to their smartphones longer than before. Only few people can afford to shell out $600+ phone every year. And same goes to other brands Apple, HTC, BB etc. well i could be wrong.

  • q34t

    height of joblessness..

    • felixtaf

      Jus like your height of foolishness…

      • q34t

        period

  • Chindavon

    I think Sammy just causes confusion to the “average” customer with all the different Galaxy models, that people throw up their hands and move on to something else. Flood it and “average” people tend to drown.

  • Altechi

    I wonder why I keep seeing Android, more so Samsung posts in here. I guess slow news day. I mean if I was going Android The HTC One IS definitely better

  • Ben Giddings

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