Reputable analyst expects Galaxy S20 sales to prove underwhelming

Unlike the somewhat contentious Galaxy Z Flip, which kinda sorta went up for sale shortly after its official announcement, the Galaxy S20 lineup still cannot be purchased or even pre-ordered just yet. That’s going to change in a few days in the US, but until it does, all we can do is rely on industry pundits and analysts to predict potential demand for Samsung’s new “mainstream” high-end smartphones.

One of the most respected and reliable such voices is undoubtedly that of TF International Securities analyst Ming-Chi Kuo, and although his reports, investor notes, and general educated guesswork are typically focused on Apple stuff, we have a new forecast tackling Galaxy S20 series sales today, courtesy of cnBeta (translated).
Kuo apparently expects Samsung to be able to ship anywhere between 30 and 32 million copies of these latest-generation flagship handsets around the world by the end of the year, which may not sound bad until you realize one very important thing.

Can the Galaxy S20 family really prove less popular than the S10 series?

Yes, if Kuo’s prediction comes true, the S20/S20+/S20 Ultra trio will be outsold by last year’s S10/S10+/S10e lineup. We’re not talking lifetime shipment figures, mind you, as Samsung is tipped to sell no more than 32 million flagship units in 2020 alone after reaching an estimated 36 to 38 million units last year. At best, that would represent a drop of 11 percent, although if the S20 family barely crosses 30 million shipments and we take the high end of the S10 estimate into consideration, Samsung could be looking at a massive decline of over 20 percent.

Of course, not even Ming-Chi Kuo can predict the distant future with razor-sharp precision… always, but at the same time, his forecast obviously relies on a number of objective and subjective factors, ranging from the appeal of the Galaxy S20 hardware upgrades to the family’s “innovation in user experience” (or lack thereof) and competition from… the Galaxy S10 trio.
That’s right, one of the big reasons why S20 series sales may prove less than impressive is the permanent price cut of their predecessors announced at the same Unpacked event last week. This is an unprecedented move from Samsung that may have been inspired by Apple, substantially undermining the value proposition of the “regular” Galaxy S20 variant.

It’s also a factor that Counterpoint Research analysts didn’t take into consideration when predicting 2020 shipments of over 40 million units before the S20 family was unveiled, not to mention the firm’s pricing expectations proved wildly inaccurate.

Sales volume is not everything

Unlike Apple, which has long established a business model relying almost entirely on profit and profit margins, sales numbers have always been important for Samsung. But now that the company is no longer threatened by Huawei (not really) in its dominant spot in the market as far as volume goes, it appears that Samsung wants to shift its focus and be more like Apple. At least the Apple of the old pre-iPhone XR days. Otherwise, how do you explain the absence of an “affordable” Galaxy S10e sequel?

Bottom line, perhaps the world’s largest smartphone manufacturer is happy with selling fewer high-end devices at higher prices than ever, fattening up those profit margins to potentially make more money in the long run. Of course, that’s all conjecture on our part, especially seeing as how it’s not confirmed just yet that Samsung will earn more from every S20+ and S20 Ultra unit sold than the S10 and S10+.

We’ll have to wait for those bills of materials to estimate the production costs of these undoubtedly amazing phones, and at the same time, it’s probably wise to wait and see the demand the S20 family will generate when it actually starts selling before comparing its popularity with that of its forerunners. 

Source: www.phonearena.com

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