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Samsung underestimates Galaxy S6 edge demand, profits decline

Samsung has announced that its earnings guidance for the second quarter of 2015, and according to the numbers published by the South Korean smartphone giant, they will see a straight seventh profit decline. Samsung will announce the final numbers by the end of this month.

The company expects sales of KRW 47.1 trillion and an operating profit of KRW 6.0 trillion for the quarter that ended on June 30. This is a 4 percent decline over the same period last year, and even though the company has not published numbers by its divisions, it is expected that this decline is due to weak sales of its smartphone. The sales, however, were better than a 30 percent year-over-year profit decline that the company suffered in Q1 2015.

Even with the launch of the Galaxy S6 and the Galaxy S6 edge, which many regarded as the best smartphone in the industry, Samsung appears to have misjudged the demand. According to the sources familiar to the matter, the company expected to sell four Galaxy S6 units for one Galaxy S6 edge units, but it appears that the demand for both the devices was on par with each other. This resulted into unsold units of Galaxy S6 (white variant in particular), and not enough units of Galaxy S6 edge to sell to consumers.

JK Shin, Samsung’s mobile chief, pledged to boost the production of the Galaxy S6 edge just days before their retail debut, but it was hard for the company due to the device’s new industrial form factor. Samsung has, since then, set up a facility in Vietnam to manufacturing as many Galaxy S6 edge units as per the demand, and the company officials have said that the company will be able to meet the demand by the end of June. This might mean that sales and profits would see a jump in the next quarter.

Via Source

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JRitchey14
JRitchey14

Shouldn’t the title be ‘over estimates’ since sales are short of expectations? Oh sammobile…..*sighs*.

DareDevil01
DareDevil01

No because they did underestimate, they underestimated the Galaxy S6 edge demand thinking more people would want to buy the standard S6, therefore, there was not enough stock so profits went down…

thegeneral2010
thegeneral2010

software my friend it is the key for everything samsung is suffering from now i have note 4 and believe me when i say that i will not repeat this experience from samsung again.

n900mixalot
n900mixalot

The left hand doesn’t know what the right hand is doing. I knew something was wrong when at the release, that software girl was jumping around like a bipolar madwoman. She sounded completely unstable.

noel haynes
noel haynes

Really? Could you elaborate please? Was looking at getting a note 4..

The1Metallian
The1Metallian

Don’t pay attention. The Note 4 is a fantastic device and you should own it. I love it! Especially after the Lollipop upgrade.

EugeneOnTheEdge
EugeneOnTheEdge

agree. Here’s a pro tip Samsung:

Fix the software and you’ll see ur profit fixed.