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Galaxy S6 and S6 edge fail to stop Samsung from predicting seventh straight profit drop

By Koh Wanzi - on 7 Jul 2015, 10:47am

Galaxy S6 and S6 edge fail to stop Samsung from predicting seventh straight profit drop

Image Source: Samsung

It looks like the Samsung Galaxy S6 and S6 edge aren’t turning out to be the cash cows Samsung thought they would be. Samsung has released its profit expectations for the second quarter of 2015 (the first to take into account sales of the new phones), where operating profit is projected to fall from US$6.26 billion in Q2 2014 to US$6.12 billion in Q2 2015.

While that may seem like a drop in the ocean of Samsung’s still-hefty profits, it represents Samsung’s seventh straight profit drop, something that the Galaxy S6 and S6 edge were supposed to halt.

First debuting at MWC 2015, Samsung’s 2016 flagships were received fairly well by reviewers and consumers alike. Thanks to its radical design overhaul that resulted in a phone that finally felt like the premium model, the Galaxy S6 and S6 edge were hailed as a move that Samsung should have made long ago.

The new flagships did help Samsung regain some ground from its 30% year-on-year profit drop last quarter, but it failed to revive the electronic division’s flagging profits. In fact, analysts are now saying that initial market expectations may have been too optimistic. While analysts surveyed initially predicted record sales of 55 million units this year, Samsung last month lowered its shipment estimate for S6 models to 45 million.

According to analyst Yoo Eui-hyung, this is partly due to demand for the S6 edge exceeding supply, and the inability of the S6 to differentiate itself from the iPhone 6. Meanwhile, Samsung’s semiconductor operation continues to do well, which casts an uncomfortable spotlight on its once high-flying mobile division.

Source: Samsung via The Verge

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