Samsung will discount Galaxy S6 phones after launch sales disappoint

Samsung’s revenue for the quarter was KRW 48.54 trillion, a 3 percent increase quarter-on-quarter (QOQ), while the operating profit for the quarter was KRW 6.9 trillion, an increase of KRW 900 billion QOQ.

Profit for the mobile division though fell to 2.76tn won from 4.42tn won a year earlier.

To counter the loss, Samsung will now “flexibly adjust” the price of the S6 and launch new mid to low-end products in a bid to halt the reverse in the smartphone market.

The company will now be seeking to recoup losses by cutting the price of the Samsung Galaxy S6 and the S6 Edge.

Operating profit at the semiconductor business, which produces memory chips and application processors, nearly doubled to 3.4 trillion won in the second quarter compared with 1.86 trillion won a year earlier. Samsung said it benefited from strong semiconductor demand in the mobile and server markets and it expects this to continue in the rest of the year. Operating profit at the division almost halved year-on-year, to KRW 2.76 trillion from KRW 4.42 trillion.

In addition, CNET reported that a person familiar with the matter said that the price cut to the Galaxy S6 and S6 Edge is a way for Samsung to attract new buyers.

Undoubtedly the most worrying trend here is Samsung’s mobile department, which is traditionally its biggest money maker.

In an attempt to cushion the continued slide in earnings, Samsung has advanced the timing for the launch of its flagship smartphone-tablet hybrid device, likely called the Galaxy Note 5 and focused on business users, by about three weeks to August 13 from its usual launch period.

Its consumer electronics division, which makes televisions, fridges, and other home appliances, made a 210 billion won profit, down from 770 billion won a year ago.

Samsung Electronics suffered a fifth straight drop in quarterly earnings as the Galaxy S6 failed to reverse its declining fortunes in global smartphone sales. “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”.