Samsung recently announced its latest quarterly earnings, and the South Korean phone maker warned that its mobile business will likely face some tough times ahead. The company even said that is planning to adjust the prices of its two flagship devices, the Galaxy S6 and the Galaxy S6 Edge in order to hit the target volume of unit sales. Lastly, Samsung also revealed that it will launch new high end handsets as well as midrange and budget friendly smartphone offerings.
Although Samsung did not give out any details about the price adjustment for the Galaxy S6 and the Galaxy S6 Edge devices, sources that are familiar with the mobile manufacturer’s plans said that it will most likely involve a price cut for the two smartphones.
During the second quarter of this year, Samsung’s sales for its IT and mobile business dropped 8.4 percent to $22 billion, with mobile falling 7.3 percent to $21.6 billion.
For years, Samsung has built a reputation as a leading maker and seller of smartphones. But in recent quarters, the company has suffered dwindling sales and decreasing market share as it continues to face fierce competition, particularly from its rival Apple whose recent run of successful iPhone releases has left Samsung scrambling for an answer.
Smartphone shipments used to make up two thirds of the South Korean mobile manufacturer’s operating profit, but in the last few months, mobile’s share in the company’s profits have been dropping. Plus, up and coming Chinese phone makers like Xiaomi and Huawei have started to eat away at Samsung’s formerly untouchable market share.
Samsung does not traditionally publish information about how many units it has during a certain period of time, instead leaving that task to various industry watchers. For the second quarter of 2015, analysts estimate that the company shipped some 71 million to 76 million units of its smartphones, as reported by the Wall Street Journal.
The company was hoping to rebound with the launch of its two newest flagship devices, the Galaxy S6 and the Galaxy S6 Edge, in April of this year after its previous flagship offering, the Galaxy S5, failed to achieve stellar sales. But it is apparent that the Galaxy S6 smartphone was not enough to boost Samsung’s profit margins. If it is any comfort to Samsung, it is not the only one experiencing woes. HTC had announced earlier this month that it was posting a loss for the second quarter of this year.
Samsung has managed five consecutive quarters of record profits before this recent string of struggles. To get back to the top, the company will really need to find some answers soon.
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