Rumor: Samsung slashes smartphone part orders for first time in company history

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A new report out of Korea claims Apple's chief rival Samsung is slashing orders for new smartphone parts, marking the first time the company has done so in its history.

Samsung allegedly plans to cut production of its new flagship Galaxy S4 handset by between 10 and 15 percent, according to, which cited anonymous sources. The company reportedly plans to build 6.5 million Galaxy S4 units in the month of July, which would be half the number it build in May.

The company allegedly saw a "warning light" this month, when inventory began to back up as Galaxy S4 sales slowed. That's apparently prompted the company to cut orders heading into the month of July.

In addition, the company also apparently plans to retire its previous-generation Galaxy S3 handset sooner than originally anticipated, the report said.

Rumors of disappointing sales of the Galaxy S4 have persisted for weeks now. They became so prevalent that the company's chief executive was compelled to comment on the matter last week, suggesting that Galaxy S4 sales have been "fine," without giving specific numbers.

The persistent rumors have also taken a toll on Samsung's stock, a situation not unlike the one Apple faced starting in late 2012. Apple's losses were attributed to investor concerns that iPhone growth was slowing.

Both Apple's iPhone 5 and Samsung's Galaxy S4 compete in the high-end smartphone segment — a market that industry watchers believe could be reaching saturation. That's helped to fuel speculation that Apple could launch a new low-end iPhone this year to target customers who prefer unsubsidized handsets that are not tied to a new two-year service contract.


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