It’s a far cry from just a few years ago, when the company could still rely on its mobile division to deliver major profits – especially in China.
The decline in the mobile profit was smaller than the previous quarter’s almost 60 percent plunge, but it extended the mobile division’s losing streak.
Hoping to recover from its insufficient first quarter sales, Samsung relied on the profits it will earn following the release of its flagship handsets the Galaxy S6 and Galaxy S6 Edge in April.
“The regular S6 had so-so demand, seems like it was disappointing, and the S6 Edge wasn’t enough to make up for it due to the supply issue”, Mark C. Newman, an analyst at Sanford C. Bernstein, said before the earnings release. Samsung said earlier this year that it plans to focus on more premium devices, in an effort to improve the profitability of its hardware range.
The company expects things to improve in the near future, spurred by the imminent launch of the Galaxy Note 5, and Samsung said during the earnings call that it has a big-screen smartphone up its sleeve. “They brought out a unique phone, the S6 Edge, but its differentiation wasn’t valued versus the iPhone 6 or 6 Plus at similar prices”.
Samsung Electronics Co. remained the No. 1 seller of mobile phones in the world in the second quarter of this year despite strong performances by cheaper Chinese rivals, data showed Thursday.
At a separate board meeting, Samsung also doubled interim dividend to 1,000 won per share.
Overall, Samsung recorded an eight percent drop in net profits in its second quarter 2015 financial results today, falling to 5.75 trillion won (£3.2bn).
Nevertheless, Samsung expects the smartphone market’s growth to continue slowing down for the second half of 2015, thus prompting the company to “flexibly adjust” its prices for the Galaxy S6 and S6 Edge, much to its consumers’ delight, according to Mashable.
The company revealed that it would be “adjusting” the price of the Samsung Galaxy S6 and the Samsung Galaxy S6 Edge in order to boost sales and profits.
Samsung intends to remedy this with its new Galaxy Tab A series and another “new product scheduled for later this year”.