Samsung Electronics has ordered 20% less components for the Galaxy Note20 compared to its predecessor, people familiar with the matter told TheElec.
It is like to minimize stock following its miscalculation of demand for the Galaxy S20 series launched earlier this year that sold less than internally expected.
Samsung has ordered 20% less components for the Note20, which will come in a 6.9-inch screen Ultra version and a 6.7-inch screen standard version, compared to the Note10 series launched a year prior.
The South Korean its expecting an initial shipment of 3 million units for the latest Note smartphone after sales begins, the people said. It is expecting total shipment of around 10 million units by the end of the year.
The people said Samsung took a conservative approach to securing parts for the smartphones due to the uncertainties over the COVID-19 pandemic and the lackluster sales of the Galaxy S20 series.
The conglomerate will control the amount of parts it orders depending on market situations to minimize stocks, they said.
Samsung expected the S20 series to sell around 35 million units but actual sales fail to match the goal. Only the Galaxy S20 Ultra, the highest tier out of the three models offered in the series, saw high demand but Samsung miscalculated its demand. The supply failed to meet demand and the South Korean tech giant increased production for the S20 Ultra but by that time has lost the window for greater sales.
Samsung expects the Galaxy Note20 Ultra to account for 70% to 80% of sales out of the two Note models. It is hoping that the smaller, standard Note20 sells well in Europe, a market that seems to prefer smaller smartphones. Last year, for the Note10 series, the Note10 Plus accounted for 70% of sales.
Galaxy Note20 Ultra has a 120Hz edge display, sports a 100MP camera and supports up to 5 times optical zoom. The standard Galaxy No20 has a 60Hz display and has a flat display screen.
Even if the Note series reach 10 million in shipment, when combined with the S20 series 20 million units, Samsung would have sold a little over 30 million flagship smartphones in 2020. This a huge downturn compared to its heydays between 2014 to 2017 when it moved up to 45 million flagship smartphones a year.