Midtown Blogger/Manhattan Valley Follies: endgadget- Samsung will discount Galaxy S6 Because of Slow Sales

Samsung's earlier prediction for the second quarter of 2015 was spot on: the company hasfailed to hit its goals when it comes to the sales of its flagship devices. Its operating profits fell four percent to 6.9 trillion won ($5.9 billion), and the mobile division's, in particular, slid to 2.76 trillion won ($2.4 billion) from 4.42 trillion won ($3.8 billion) from the same quarter last year. While those profit numbers are still three percent higher than the last, it's going to be tough to play catch up this second half of 2015, as Apple's slated to reveal its new iPhones -- its main rival in the world of high-end smartphones. In order to combat the expected sales drop, Samsung is "adjusting" (read: dropping) the prices of both the Galaxy S6 and the S6 Edge. It's already planning to introduce new premium smartphones: the company has already teased an event for August 13th, where it's likely to introduce a new Galaxy Note and a larger S6 Edge.

According to Bloomberg and Reuters, Samsung's experiencing this slump, because it didn't anticipate the Galaxy S6 Edge's popularity and wasn't able to keep up when there was a huge demand for it. Lee Seung Woo, the analyst Bloomberg consulted, even foresees the company selling 40 million smartphones this year instead of 43 million like earlier projections stated. Whether that will change with the S6's price drop and Samsung's upcoming phones remains to be seen.

To note, the company's TV and appliances division is struggling, as well, posting a 210 billion won ($180 million) profit, down from last year's 770 billion won ($660 million). Samsung plans to expand its premium model lineup with curved TVs and other products to remedy that. Unlike its mobile and consumer electronics businesses that failed to meet expectations, though, the company's memory chip and processor division seems to be doing very well. Its profits are up by 1.54 trillion won ($1.3 billion) from last year, and it's reportedly going to supply the upcoming iPhone's processors.

463 people listening

Newest | Oldest | Top Comments

1New Comment Refresh

Polarbear0013 minutes ago

You know what's interesting. The iPhone is responsible for the absymal performance of the mobile devision and at the same time the reason why chip and processor is doing well.

The chip division is making about 40% more profits than the mobile division and is Samsung's biggest money maker now. If you take out taxes from mobile profits there's not much left. Let's hope for Samsung that Apple doesn't change his mind regarding its chip suppliers. Samsung isn't the only company that can make chips for the iPhone.