Samsung sets aggressive shipping targets for Galaxy S24

Samsung Electronics' Galaxy S23 series [SAMSUNG]

Samsung Electronics has set a shipping target of 35 million units for its Galaxy S24 series, which will be released next January.

This would be a 10 percent increase from the previous S23 series' output.

The Samsung Electronics mobile experience (MX) business team is preparing to ship around 253 million devices, including the S24 series, next year, according to the IT and communications industry on Sunday.

Samsung’s rival Apple has also presented plans to produce 250 million iPhones next year. This would put the two businesses’ shipping output at “practically the same level,” according to industry sources.

Samsung’s total shipments have so far exceeded Apple’s by a narrow margin, but next year would mark the first time the gap between them has narrowed to less than 10 million units. Some predict that Apple's smartphone shipment figures might even surpass Samsung's.

More than 75 percent of Galaxy phones are lower-priced models. The average selling price for iPhones was $988 in this year’s first quarter; for Galaxy phones it was $295 in this year's third quarter, or around one third of the price of an iPhone, according to financial markets.

To counter this, Samsung Electronics has set 2024 to be the “first year” of its “flagship counterattack” strategy to sell more high-end phones and take the lead in the premium phone market.

The Galaxy S23 Ultra phone was the 6th bestselling phone in the first half of this year, and was Samsung's only flagship to break the top 10. Following sales results, the company set the target shipment for the S24 series, which includes the regular S24, S24 Plus, and S24 Ultra, to around 35 million devices. That is an aggressive target, considering that shipments for the S21 and S22 series have finished at around 30 million devices annually, and that the S23 series shipped 31 million devices.

“We expect premium-centered demand to increase in the smartphone replacement cycle next year. We achieved double-digit growth in annual flagship shipments and sales growth exceeding the market growth rate,” said Daniel Araujo, VP of the MX division, at Samsung’s third quarter earnings announcement.

Estimated [JOONGANG PHOTO]

Samsung aims to increase its production of foldable phones, marketed for their “next generation small form factor,” to more than 10 million devices. Target output for the Z Fold 6 series, coming in the latter half of 2024, has been set to 8.2 million devices. This output would be similar to that of the previously successful Galaxy Note series, which sold 8 to 10 million devices annually.

This latest move from Samsung is seen as an urgent response steeped in a sense of crisis. Sales of the firm’s mobile devices are lagging in both the premium and lower-priced smartphone markets, losing ground to Apple in the market for high-end phones more than 800 dollars, and to Chinese brands Vivo and Oppo in emerging markets for mid- to lower-priced phones.

Samsung is banking on AI as its competitive advantage. An “on-device AI” that allows for AI use without an external connection will be installed on the new Galaxy phones, and will act as an “AI hub.” Generative AI technologies will be applied to key smartphone utilities such as those for photos, messages, and speech recognition.

To that end, Samsung is also looking for ways to collaborate with Microsoft and Google to bring ChatGPT or Google's Bard to the Galaxy series.

“It is thought within Samsung that, should the AI smartphone take off, it is an opportunity after 10 years to take the lead in the smartphone [sector],” said an anonymous source from the industry.

BY LEE HEE-KWON, KO SUK-HYUN, KIM JU-YEON [kim.juyeon2@joongang.co.kr]