Samsung Galaxy Note 7 Demand Forces Production Ramp Up

With demand high and supply limited, Samsung is having to ramp up production of the Galaxy Note 7.  Reuters reports that the Korean company has had higher demand than they expected for the Note 7 and that they will be sorting out how and where to increase production to meet the needs.

“As pre-order results for the Galaxy Note 7 have far exceeded our estimates, its release date in some markets has been adjusted,” Samsung told Reuters in a statement without commenting on where launch delays could occur.

Samsung has made similar comments in the past, most notably on last year’s Galaxy S6 Edge, and one could argue that they creating a false urgency in the market.  While there is probably a little bit of truth to it, the numbers don’t lie.  Samsung is expected to sell upwards of 15 million Galaxy Note 7’s this year and delays in launching have already happened with further “adjustments” to the launch schedule made to try to keep up with demand.

The challenge, of course, is that Samsung risks losing buyers outright to competitor products so the faster they can ramp up that production, the better.  Samsung’s stock was down 2% yesterday after this news broke.

Analysts do not think this is a long term problem and that Samsung will right the production ship quickly on the Note 7.

Samsung Galaxy Note 7
Samsung Galaxy Note 7

A person familiar with the matter told Reuters there was no production issue for the curved screens used on the Galaxy Note 7 and that the shortage would not be a long-term problem.

“The party got more visitors than Samsung expected, so they just need to put more food out,” said Nomura analyst C.W. Chung, who said the supply situation was not a major risk given that Samsung made key parts such as displays and chips in-house.

Here in the United States, supplies of the Note 7 have been limited but not outright impossible to get hold of if you want one.