Samsung may register a healthy smartphone sales growth in 2024

Samsung Galaxy S24 Ultra review AM AH 21

Samsung‘s smartphone business division has had a successful first half of 2024. Thanks to excellent Galaxy S24 sales, the company exceeded internal production targets by a huge margin in Q1. Its Q2 production will also be slightly higher than the initial target, the Korean media reports. If it maintains a similar growth rate for the rest of the year, its total smartphone sales could increase by around 10% in 2024.

Samsung exceeded smartphone production goals in the first half of 2024

According to TheElec, Samsung produced 64.5 million Galaxy smartphones and tablets in the first quarter of 2024, 22% more than its original target of 52.9 million units. In the second quarter, its total production could reach 49.9 million units, a 3% increase over its internal target of 48.3 million units. Combined, Samsung has surpassed its smartphone and tablet production target for the first six months of the year by 13%.

The second half of the year is usually off-season for Samsung because of the lack of major new launches. It does launch new foldables in the third quarter but these devices aren’t a crowd-puller. Moreover, the Korean firm’s foldable share has been tumbling as more players enter the market. New Pixels and iPhones also affect Galaxy sales. However, Samsung may still manage to increase its sales this year compared to 2023.

If it maintains a respectable growth rate in the second half of 2024 over the same period last year, Samsung might register a healthy smartphone sales increase this year, potentially a 10% jump in global shipments. A lot will depend on the success of the Galaxy Z Fold 6 and Galaxy Z Flip 6. The Galaxy S24 FE, which arrives later in the year, could also be a variable if Samsung decides to load the Fan Edition phone with a wide range of AI features.

Samsung will be cautious to not over-produce and pile up inventory

Samsung may have exceeded production goals in the first half, but the company will be cautious to not over-produce in the second half. As said earlier, Galaxy S24 sales will dip as the year progresses. If it increases its production goal and makes more units, it could pile up its inventory. A large stock in the inventory will affect profits, which will anyway go down as sales drop and the company introduces discounts and promotions.

The new report says Samsung’s smartphone division generated a sales revenue of 33.53 trillion won (approx. $24.1 billion) in sales in Q1 2024. The operating profit came in at 3.51 trillion won (approx. $2.5 billion), which marks a profit margin of 10.5%. In the second quarter, the sales revenue is expected to clock 29 trillion won (approx. $20.9 billion) but the profit margin will drop to 9.6%, making Samsung a profit of 2.8 trillion won (approx. $2.0 billion).

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