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Samsung Galaxy S III Hits Supply Chain Snafu

{complink 4751|Samsung Electronics Co. Ltd.} is one of the more vertically integrated companies in the consumer electronics marketplace, but the Korean company still managed to run into supply problems with a key component used for its latest smartphone, the Galaxy S III.

News reports indicate Samsung failed to anticipate the roaring demand it has now recorded for the Galaxy S III and was unable to ship as many as 2 million units of the device to telecom service providers in Europe, North America, and Asia.

Samsung expects to ship up to 10 million of the Galaxy S III in the current quarter, making the device its fastest seller. The launched the Galaxy S III ahead of the likely introduction of an updated Apple iPhone expected in the fall, and the success of Samsung's latest device should help the company continue to maintain its position as the world's biggest vendor of both smartphones and wireless handsets.

In an attempt to smoothe problems in its supply chain that contributed to the inability to meet overall demand, Samsung said it sent employees to all component suppliers to ensure delivery targets were being met. Reuters reports that the company expects soon to put the component shortage problem behind it. Analysts who slashed Samsung's smartphone shipment for the June quarter believe the company should recover quickly in the third quarter and have raised their estimates for the company.

19 comments on “Samsung Galaxy S III Hits Supply Chain Snafu

  1. SunitaT
    June 26, 2012

    Samsung failed to anticipate the roaring demand it has now recorded for the Galaxy S III and was unable to ship as many as 2 million units

    @Bolaji, looking at the pace at which Samsung sold its Galaxy S III mobile do you think Galaxy S III is true competitor to iPhone ? Do you expect iPhone 5 release will impact the sales of Galaxy S III ?

  2. Mr. Roques
    June 26, 2012

    Maybe that will even help the SIII… “sorry, we ran out! it sold out in a day” That would leave the potential buyers wanting it even more. Although I wouldn't expect Samsung to have this sort of issues, they're too big, too much experience.

  3. syedzunair
    June 26, 2012

    tirlapur: I don't think that Samsung S III will be a competitor to the iPhone because both of them respresent two distinct market segments based on the mobile OS platform. One represents Android and the other the iOS. Since, in my view the consumers are segregated on basis of the platform and there will not be many who will be willing to switch platforms. I think SIII will not impact the sales of the iPhone or vice versa. 

  4. bolaji ojo
    June 27, 2012

    Syed, Sorry but I believe the Samsung Galaxy S III is a direct competitor to the iPhone as the iPhone is a direct competitor to the Samsung Galaxy S III. Everytime a consumer selects one device in place of another, the ignored device losses out. Samsung is the leading smartphone vendor in part because of the Galaxy series.

  5. Eldredge
    June 27, 2012

    It sounds like Samsung is taking the right steps to address their supply side issue,  and will do very well in the next quarter.

  6. SunitaT
    June 27, 2012

    I think SIII will not impact the sales of the iPhone or vice versa.

    @syedzunair, Everyone is eagerly waiting for iPhone5. If iPhone 5 features disappoints then I think this will give further boost to Samsung galaxy sales.

  7. Himanshugupta
    June 27, 2012

    @syed, as a consumer i personally do not care which platform i am using in smartphones as long as it can meet my basic requirements: money, compatibility with other hardware, apps, some of my friends should use same OS, features etc. And due to lack of enough choices in high end smartphones the only competitor to iPhone at this stage is Galaxy S series.

  8. elctrnx_lyf
    June 27, 2012

    Even the price of galaxy s3 is almost same as iPhone, still this phone has received many compliments from the gadget savvy customers. Looks like they will never have enough of the features.

  9. syedzunair
    June 27, 2012

    Bolaji, there may be a difference of opinion. I proposed that they are not direct competitors based on the assumption that Apple consumers most often buy only iPhones (at least from what I have seen). So, the market share that Apple has is constant if not growing with every iPhone release. 

    However, broadly speaking in the mobile market both of them are direct competitors like you said based on the features and price range. 

  10. syedzunair
    June 27, 2012

    @tirlapur: I agree with you that most people are waiting for the iPhone 5 launch. However, I am not sure if the features dissapoint the market would go for SIII. Over the years I have barely seen people leaving the iPhone for other phones. So, probably I might be an iPhone lover but I think iPhone 5 will still do good business. 

  11. syedzunair
    June 27, 2012

    @Himanshugupta: You are certainly correct about consumers making the purchase decision on the basis of cost, compatibility, OS platform and their friends circle. For some one of these factors would weigh much higher than it does for others. Similarly, for most Apple users that I have seen the platform, i.e. iOS is the decisive factor. I may be wrong but this is what I have actually seen here. 

  12. ahdand
    June 30, 2012

    Well I think its more of a hype rather than the sales turnover for s3. They created the hype and people are falling for it. A typical marketing gimmick but a good one.

  13. syedzunair
    June 30, 2012

    @nimantha.d: Apart from the marketing gimmick it has to do with the record breaking sales that SII did in the previous year. People are now increasingly trusting the Galaxy S brand and want to try out any new version that is available on the market. 

  14. ahdand
    July 6, 2012

    Well otfo me. I feel Apple is the best. I think its just a matter of time until apple compes with the latest. Untill then S3 will be on top. Anyway thats how the market works.

  15. syedzunair
    July 12, 2012

    I agree with you. The market has its own highs and lows. Therefore, probably SIII will rule the Android market right after it is launched. 

  16. ahdand
    July 14, 2012

    I think S3 is not that good as its been shown by Samsung when you compare with the technology and the ability of Apple.

  17. SunitaT
    July 15, 2012

    People are now increasingly trusting the Galaxy S brand

    @syed, I totally agree with you. Galaxy brand is in the market from couple of years and it has some great features. Best part about Samsung products is that conumers are getting the best features at reasonable cost. I am sure Galaxy is real threat to Apple iPhone series.

  18. SunitaT
    July 15, 2012

    I think S3 is not that good as its been shown by Samsung when you compare with the technology and the ability of Apple.

    @nimanth.d, I have read many positive reviews about samsung S3. It has great performance, excellent camera quality, stunning display and other rich features.I am not sure why you think its not comparable with Apple ?

  19. syedzunair
    July 15, 2012

    @Tirlapur, thanks for agreeing with me here. 

    Like I said earlier the Galaxy brand is gaining momentum in the market because it caters to all market segments, i.e. from low end smartphones to high end SIII series. And, with a comparitive pricing model it seems to be doing well in the market. It may be a threat to the iPhone but I personally think that not many iPhone users will switch to Android. I have a few friends who are iPhone enthusiasts and having asked them about switching to Android, I have always got a negative answer. 

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