Samsung reins in outlook due to tepid demand for its Galaxy S6

by Mark Tyson on 7 July 2015, 14:51

Tags: Samsung (005935.KS)

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Samsung has published its second quarter pre-earnings guidance today. Just like AMD earlier, it has felt "weaker than expected" demand for its money spinning products. In Samsung's case that's due to "tepid demand" for the flagship Galaxy S6 smartphone, reports Reuters.

The most recent quarter results will show estimated sales of 48 trillion Korean won and an estimated profit of about 6.9 trillion Korean won, says an official Samsung statement. That profits figure is four per cent lower than a year earlier and somewhat below the average analyst estimate of 7.2 trillion Korean won. This is Samsung's best profit for a year but doesn't impact upon the overall annual decline.

Several sites report that Samsung simply misread the market. Perhaps it was too cautious as when it launched the Galaxy S6 and premium curved screen Galaxy S6 Edge - as it got the balance of supply wrong. It seems that people were happy to pay the extra for the eye catching curved screen version but Samsung wasn't geared up to make them fast enough to meet demand. ZDNet reports that Samsung went ahead with the expectation that "the regular S6 would outsell the Edge 4 to 1". However demand for the two differently priced phones has been roughly equal.

Now Samsung says it is up to speed with the production of its curved screen flagship but might have simply missed the chance to capitalise upon the launch sensation. People have moved on, and are waiting for another next big thing. There's already a flurry of news about the Apple iPhone 6S and talk of new upcoming mobiles from the likes of Motorola, Sony, HTC and Microsoft.

Looking at the market in general Samsung is fighting in a tougher market, with the world's biggest smartphone market of China showing evidence of its first volume slip in Q1 this year. The upcoming quarters don't look that hot for Samsung as it will probably have to discount the regular Galaxy S6 while suffering the repeated blows of new smartphone launches from rivals.



HEXUS Forums :: 27 Comments

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Samsung are terrible at reading the market - and the initial success of the Galaxy S line lead to punishment for the engineers responsible.
I saw it coming a mile off which makes me wonder what Samsung were up to.

There was a reason that the sheep stopped buying iPhones and Apple (unsurprisingly) figured it out (even though it did take them longer than expected, although that may have been reluctance rather then incompetence)…..and if iPhone sales go up, galaxy S sales go down.
I'd actually say it's down to two reasons for Samsung, high end phones aren't needed anymore, low end phones like the moto g have changed the mobile landscape for a lot of users. Then there's performance, apart from apple that has it's ‘followers’ and artificial ‘crippling of the os’ most mobile phones from 2 years ago are still more than good enough for most people (ignoring android updates etc).

I won't mention bloatware on Samsung devices but pretty sure they're still one of the worst out there for it and android users are getting savvy to this being a reason to slow updates if any.
LSG501
I'd actually say it's down to two reasons for Samsung, high end phones aren't needed anymore, low end phones like the moto g have changed the mobile landscape for a lot of users. Then there's performance, apart from apple that has it's ‘followers’ and artificial ‘crippling of the os’ most mobile phones from 2 years ago are still more than good enough for most people (ignoring android updates etc).
Funny enough, ‘artificial crippling of the os’ was the deciding reason for me returning my Galaxy S6 128GB and buying an S5 instead.

Ultimately they've copied everything I don't like about the iPhone and thrown away everything I did like about the Galaxy series. Perhaps a lot of existing Samsung Galaxy ‘followers’ are feeling the same way, making the S6 a rather transitional phone with Samsung trying to move into a different market.
Wow, someone who actually liked the crapware Samsung provided prior to the S6!

Me? I've only got an S4, but I actually ‘upgraded’ to a SIM Only plan, because nothing out at the moment really catches my eye.