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Samsung is making drastic cuts to Galaxy A production numbers in order to curb costs inflated by the ongoing AI bubble.
These rising costs, known popularly as "chipflation", mean that a number of components used for smartphones, tablets, and other tech, are now much more expensive than before. It's not the first we've heard of Samsung attempting to keep costs down, but by dropping the hammer on its Galaxy A range, is it potentially killing the golden goose?
Samsung is reducing Galaxy A production numbers by a fifth
A huge decrease in what is Samsung's largest sales driver
Most people would assume Samsung's Galaxy S flagship range is the Korean company's most popular range, but they'd be wrong. Due to its low price and strong quality, the Galaxy A range has been Samsung's most popular phone range for some time.
Commonly bought in large numbers by enterprise customers, the Galaxy A is a big part of the reason Samsung is in such a globally dominant position. And since no good deed goes unpunished, Samsung is now cutting the number of Galaxy A phones it's making.
Samsung will be cutting its production numbers of the Galaxy A by a hefty 20%, according to a report from the Korean newspaper ET News (via Phone Arena). This amounts to around 10 million units across the range — and Samsung may not be done there, either, as it supposedly plans on cutting it by another 10% in the next financial year.
It's a huge blow for the Galaxy A, which is the go-to phone range for a lot of businesses. However, with rising costs associated with the AI bubble impacting cheaper phones harder than more expensive phones, it's clear Samsung is prioritizing high-margin products like the Galaxy S and Z, over the much cheaper Galaxy A phones.
It's clearly the right decision to make from a financial standpoint. However, it could cost Samsung in other areas.
Samsung is one of the most popular phone brands worldwide, often tangling with Apple for the top spot in sales charts. However, time and time again, it's the Galaxy A, rather than the Galaxy S, that pushes those sales numbers up. The Galaxy A phones are well known in business circles for being reliable and cheap, making them the popular choice whenever IT departments look to pass out business phones across a company.
While it's unlikely any corporations and businesses will be left without phones due to this decision, it's possible a lack of available stock could lead to longer lead times and a loss of sales overall, pushing Samsung down the charts. While Samsung is always going to be a globally recognized brand, a deluge of headlines proclaiming any sort of drop down the charts will impact its reputation.
Of course, it's possible this will not happen at all, and we may see lower smartphone sales numbers as a whole for the next few years. As long the AI bubble is artificially propped up, prices will continue to rise, and we'll likely see the impact of that in due course.
We have reached out to Samsung for comment on this, and will update when we hear back.