This year posed some very real hurdles for electronics makers but Samsung was able to power through.
2020 has been a rough year for phone makers. Sales were down across the board because a lot of people have no disposable income but do already have a phone that still works. At the component level, the first half of 2020 forced companies to stop manufacturing the tiny parts that phones need to function properly.
While every company was affected by the economy and sold fewer phones, Samsung seemingly found a way to get around it; a feat Apple wasn’t even able to do and we saw the iPhone 12 launch a month later than previous years. Other companies fared much worse because of supply chain issues and Google’s four-month late release of the Pixel 4a instantly comes to mind.
Now we’re finding out that the Galaxy S21 is launching even earlier than we expected and a January 14, 2021 announcement means Samsung is beating its 2020 date by six weeks. Talk about weathering the storm!
Samsung released four flagship products on time while it was also designing and manufacturing a fifth.
We can’t know the whole story of how Samsung was able to pull this off. With 2020 stacked against everyone, it was able to get three major releases (four if you count the new Galaxy Tab S7) on time while designing and manufacturing the first 2021 flagship phone a month earlier than expected. This couldn’t just be luck.
However, we do know a lot about Samsung as a company and how that could be a big part of the reason. Samsung is able to feed itself in a lot of ways.
In case you aren’t aware, Samsung makes a good many parts that every phone maker uses inside phones. The best phones use Samsung displays because the company has perfected a way to make them excellent and affordable. But Samsung also makes the memory and storage used in most phones along with controllers to make them work. Fans of other companies like to dunk on Samsung even though the phone brand they like probably is filled with Samsung parts.
Samsung makes a little bit of everything. Including tanks.
Samsung also makes plenty of other electronics like televisions and headphones, home appliances like refrigerators and washing machines, and even military equipment like mobile artillery. Samsung is a bonafide giant.
None of these company divisions have anything to do with Samsung Mobile directly — the company makes clear distinctions between its divisions. But it does mean two things: component makers who build things like resistors or diodes value Samsung’s business because it orders so many pieces. Those kinds of parts are in many of Samsung’s products, so it means the orders from Samsung as a whole are going to be much higher than almost any other company. When that happens, favored customers get bumped to the front of the line.
Having Samsung’s appliance division with a warehouse full of parts doesn’t help Samsung Mobile very much and since the divisions are sandboxed from each other the mobile division can’t just wander in and take what it needs. But Samsung is also one of Samsung’s biggest customers and the company regularly sells components and assemblies from one division to another. Samsung Mobile has to pay for a Samsung display and it can buy the surplus stock of optocouplers or diodes to build a regulated power circuit in a phone.
The supply shortage just doesn’t mean as much for Samsung as it did for other companies.
The supply shortage just doesn’t mean as much for Samsung as it did for other companies. Apple is a great example here. It’s pretty well known that Apple micromanages the entire iPhone supply chain and as a result, it gets the parts it needs at a cheaper price. Apple is also very smart and will order more than it needs so there is stock available if and when it’s needed. For example, Apple ordered several hundred thousand more Samsung display units than it used for the iPhone 11. It had to pay a penalty for not buying them all, but running out of displays would be much worse.
But Apple doesn’t have other divisions that also hold a surplus to draw from. The iPhone and the Mac are both products from a single company and Apple wants to be able to build enough of both to meet initial demand. But when the manufacturing of small electronic components came to a grinding halt for 90 days in early 2020, it forced Apple to delay its best-selling product by a month.
Being just one month behind was still an amazing feat and shows just how good Apple is at managing the supply chain. But Samsung has that ace up its sleeve that Apple doesn’t. Samsung just had more parts on hand to have things like motherboards built. No other company — even mega electronic conglomerates like LG or Lenovo — were able to do as well during the dark days of 2020.
Other companies now plan to release early in 2021 according to industry rumors.
Seeing the Galaxy S21 releasing early is good news for Samsung and might be good news for the entire industry. We’ve heard that Chinese phone makers like Xiaomi and OnePlus also plan to release early in 2021 so maybe it means component makers have caught up and can crank out millions of units per day again.
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