Samsung pinned high hopes on the S6 and S6 Edge phones when they were introduced in April. Even before the company also announced two new phones coming out in August 13– the Galaxy Note 5 and Galaxy S6 Edge Plus.
Samsung Electronics suffered a fifth straight drop in quarterly earnings as the Galaxy S6 failed to reverse its declining fortunes in global smartphone sales.
Samsung Electronics posted second-quarter earnings today in line with its own predictions: the company’s net profit fell eight percent year-on-year to 5.75 trillion won ($4.93 billion) on sales of 48.5 trillion won ($41.7 billion), down seven percent from last year.
And even though Samsung recorded a slight quarter-on-quarter improvement, the company says the launch of its flagship Galaxy S6 and S6 Edge phones didn’t boost the mobile division beyond making a “quite marginal” impact on the bottom line, with low smartphone shipments and increased marketing spend.
Samsung says its mobile division expects a “difficult business environment” in the second half of the year, but plans to keep up sales momentum by “adjusting the price” of the Galaxy S6 and S6 Edge, along with introducing some new high-end phone models — likely the Galaxy Note 5 and Galaxy S6 Edge Plus. Samsung is holding an Unpacked event in New York City on August 13th, meaning we’ll see its bigger phones a little earlier this year than usual.
The Declining Profits of Samsung Mobile
The iPhone 6 and 6 Plus along with fierce competition at the low end are putting the squeeze on Samsung Mobile’s profits.
But the story here is how Samsung continues to struggle against Apple at the high end of the market, even after releasing its most critically acclaimed phones in years — it’s clear that the S6 twins haven’t been major hits. Is there anything Samsung can do to bring the luster back to premium Android phones amid intense competition from the likes of OnePlus, Motorola, and Xiaomi? And can it regain the chunk of the high-end market it’s lost to Apple? Samsung’s next answers will come in a couple of weeks.