Samsung to Cut Back Galaxy S6 Pricing as Smartphone Shipments Decline


SAMSUNG CSCSamsung just released its Q2 financials and as many had anticipated more so after that advisory the company issued in the lead up to the earnings call, things are not as rosy as they once were in its mobile division. Despite registering an increase in its revenues which stood at 48.54 trillion Korean won, Samsung Electronics’ mobile division did not fair that well. No, the division did not turn in a loss, it had a tight profit margin but the trend in declining shipments continued.

Despite having two new high end smartphones in the market, issues to do with shortages due to the strong demand for the Galaxy S6 Edge in the market and high marketing costs made sure that Samsung Electronics had to rely on its other businesses. Thanks to those, it was able to turn in an operating profit of 6.9 trillion Korean won in Q2 2015, a 3 percent rise quarter on quarter.

It’s chip and TV businesses helped cover up for the less stellar performance of its mobile business. While new high end smartphones and an existing tablet lineup were not enough to present the company with the margins it needed, it’s newer TVs (more so the more premium UHD ones) saved the day.

How does Samsung plan on addressing this?

  • “flexibly adjusting the price of the Galaxy S6 and S6 edge”
  • You guessed it right. That upcoming Galaxy S6 Edge+ is part and parcel of the plans. Unlike the Galaxy Note 5 which has always launched around this time of the year, the S6 Edge is expected to mark the coming to age of those Samsung facilities it had set out to build in order to handle the high demand for the dual-edge screen that the current Galaxy S6 Edge rocks. Samsung also notes in its release to the media that all Galaxy S6 Edge supply issues have since been sorted. The pushback in the traditional release cycle of the Galaxy Note 5 is widely expected to give the company an edge over competitors like Apple as it seeks to appeal to the same premium smartphone-loving crowd that Cupertino has always courted and won their hearts.
  • With an increasing focus on emerging markets by its rivals, Samsung is also counting on new mid-range and low end devices to drive sales of its smartphones in the second half of the year since smartphone shipments are expected to increase this year.
  • Whereas the global tablet market shipments are expected to decline in the second half of the year, Samsung is counting on its newly announced Galaxy Tab S2 and the Galaxy Tab A lineup to stay on track.
  • An unnamed “new product” is also expected to be a key factor in shoring up the Korean giant’s profits. While the aforesaid product could be just about anything, we expect that to be the new generation Samsung Gear smartwatch.
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Emmanuel writes on mobile hardware, software and platforms.