Samsung has posted preliminary figures for the First Quarter of 2015 with operating profit falling 30%. Samsung exceeded analyst expectations by posting an operating profit of about 5.9 trillion won, or $5.4 billion, in the quarter, down from 8.5 trillion won a year earlier. Sales totaled about 47 trillion won, down roughly 12 percent from 53.7 trillion won in 2014.
Samsung’s operating profit decline highlights how competitive pressure from Chinese rivals at the low end of the market and Apple’s iPhone at the high end has been squeezing Samsung. This is good news for Samsung and could mark a turnaround after six quarters of fall in profits. Underscoring the turnaround, are two trends: better-than-expected early sales for the company’s new high-end Galaxy S6 phone, and new demand for its microchips.
The Galaxy S6 presents a new freshness in the design of Samsung devices with the curved screen over the side of the phone and other stylistic intricates. Samsung will also supply Apple with A9 chips for the next iPhone which will be a big boost for its profits. Research group IDC noted in a report on sales for the quarter that ended Dec. 31 that Samsung sold 33 million more handsets in the same quarter a year earlier as Apple despite the unit sales of the two tying.
Samsung will start selling the Galaxy S6 from 10th April and the reception of the device by consumers, critics and media has been great so far. This is a come-back from the Galaxy S5 which received backlash from many and this was the commencement of a sales decline. Samsung went on to change product design with the Galaxy Alpha, a design that was emulated for the Galaxy Note 4, a very great design.
Galaxy S6 represents yet another design overhaul. Things are looking up for the high end, but we are yet to see whether the Chinese eating from the bottom will still take a chunk off the mid range and entry level sales.