Robert Yi, Senior Vice President, Samsung Electronics has stated that the company will trim down its mobile inventory by 25% to 30% by 2015.
With numbers that are simply mind boggling, Samsung are the global leader in terms of shipping volumes and product lines and boast 171 phone types, of which 56 were launched in 2014. You can add a further 27 new tablets to those numbers.
Highlighting the need to achieve economies of scale, Yi stressed on phasing out of less popular models and investing more on the popular ones. Even though this would lead to lesser sales volume, it would be the right direction for the company to maintain profit margins.
According to the Wall Street Journal, Samsung had maintained 15% profit for ten consecutive quarters until the third quarter of 2014 when it reported 49% drop in profits. This coincided with the increasing popularity of the iPhone 6 models as well as stiff competition from Chinese manufacturers Huawei and Xiaomi in the budget phones category.
In terms of its sheer numbers at present, a drop of 30% may not be enough to sustain 15% profitability unless the company sticks to its new found philosophy in the long run and further trims up its inventory.[signoff predefined=”Enjoy this?” icon=”icon-users”][/signoff]
