Samsung Galaxy S6 Price Drop Incoming After ‘Below Expectations’ Sales Numbers
According to a report in the Wall Street Journal last month, Samsung told its investors in the Spring that it expected to sell three Galaxy S6s for every S6 edge that it sells. Samsung shares moved in negative territory in Seoul trading, falling more than 1.6 percent in the morning session.
Samsung has faced a double challenge from US arch-rival Apple in the high-end smartphone market and rising Chinese firms like Xiaomi in the mid- and low-end market.
In an attempt to cushion the continuing slide in earnings, Samsung has advanced the timing for the launch of its flagship smartphone/tablet hybrid device, likely called the Galaxy Note 5, by about three weeks from its usual launch period.
While sales of the Samsung Galaxy S6 were disappointing, the company said it was unable to meet demand for the Galaxy S6 Edge due to supply issues. It generated 2.8 trillion won operating income from the mobile business compared with 4.4 trillion won a year earlier.
Even after Samsung’s (KRX:005930) big unveiling of the Galaxy S6, a phone expected to turn around profits for the Korean electronics giant, the company suffered another downward trend in its latest earnings report.
Samsung also warned that it is expecting a hard rest of the year. Samsung said that was largely due to high-value memory chips and increasing demand for its mobile phone processors. And it’s looking to other parts of its business, such as semiconductors, display panels, smart TVs, and health equipment, to help make up for lost mobile sales.
Samsung said operating profit for its semi-conductor unit surged 80 percent in the second quarter to 3.4 trillion won. The division logged profits of two.nine billion dollars – a five-year high – and all-time record sales of nine.seven billion dollars.
Total revenue reached 48 Trillion KRW ($41.28 Billion) from all of Samsung businesses. Smartphones accounted for around 80 percent of the units shipped.
“To increase their success against Apple, Samsung needed to bring to the table a unique and valuable proposition versus the iPhone 6 and iPhone 6 Plus”, Moorhead wrote in an email. “There’s a possibility that the third-quarter sales price could slightly drop”.
As the company forecasted earlier this month, Samsung Electronic posted yet another drop in its quarterly profits.