Samsung Galaxy S6 Discount Likely As Earnings Plummet

Analysts at Deustceh Bank said, “Samsung continues to struggle at the low-to-mid end, while the Galaxy S6 and S6 Edge combined look on course to reach a respectable 45 million units this year“.

Samsung Electronics reported Thursday a fifth straight quarterly profit drop as the Galaxy S6 series of smartphones failed to reverse its declining fortune in the smart phone industry.

The Galaxy S6, which Samsung Electronics launched in April, is a massively redesigned smartphone that was geared toward boosting the company’s profit margins and competing with Apple.

Samsung will add more middle- and low-end models, change pricing on the S6 and cut spending in the phone division.

As in previous quarters, most of the pain came in the company’s once-highflying mobile unit.

Sales in this division also fell 28.45 trillion won (£15.5 billion) to 26.06 trillion won (£14.2 billion).

Shares of Samsung fell 0.4 percent to 1,248,000 won as of 9:02 a.m.in Seoul.

Profit at Samsung’s semiconductor business, which makes memory chips and applications processors, was 3.4 trillion won, compared with 1.86 trillion won a year earlier.

Market watchers attributed Samsung’s boring second-earnings to lackluster returns from its mobile business.

However, it wasn’t all bad news for Samsung.

As a solution, Samsung is considering offering customers with discount deals on the Galaxy S6 and Galaxy S6 Edge.

The Korean tech giant announced an 8 percent drop in second-quarter net profits at the company’s conference call on the day as its smartphone business remained sluggish on lackluster Galaxy S6 sales. Operating profit and sales are estimated at 6.9 trillion won and 49.5 trillion won, respectively. But new iPhones in September would limit Samsung’s third-quarter sales growth, analysts said.

As Bloomberg points out, one reason its latest phones didn’t perform particularly well despite critical acclaim and heavy marketing is that the company misread customer demand.

“When it comes to competing with the iPhone – Apple has an entire ecosystem around their devices which Samsung just doesn’t have”. However, net income rose 25 percent from 4.52 trillion won in the preceding first quarter.