Samsung Eyes Mobile Price Cuts After Disappointing Sales, Misjudging Galaxy S6 Edge Demand
Samsung's uniquely designed Galaxy S6 Edge with its display that curves around both sides was part of the company's comeback plan in the high-end smartphone market. It was supposed to help renew interest in the Galaxy series after consumers had grown bored with the same plastic phone being recycle and upgraded each generation, and the problem is, the strategy worked.
How is that a problem? Simply put, Samsung failed to predict how popular the Galaxy S6 Edge would be. Combined with manufacturing difficulties, the company saw a shortfall in sales partially because it just couldn't produce them fast enough.
Between manufacturing difficulties and the regular Galaxy S6 seeing stiff competition from Apple's iPhone 6 and iPhone 6 Plus, plus aggressive competition from Chinese manufacturers in the low end, Samsung saw a profit decline for its fifth consecutive quarter.
In particular, Samsung's mobile division saw a 38 percent decline in operating profit to 2.76 trillion won (around $2.35 billion in U.S. currency). And though it expects a rise in smartphone shipments going forward, the company plans to reduce the price of its flagship Galaxy S6 and Galaxy S6 Edge devices.
Samsung's financial situation underscores how brutal the mobile market is. At the same time, Samsung demonstrated an ability to renew interest in its Galaxy series, there's just little room for error (such as manufacturing shortfalls).
How is that a problem? Simply put, Samsung failed to predict how popular the Galaxy S6 Edge would be. Combined with manufacturing difficulties, the company saw a shortfall in sales partially because it just couldn't produce them fast enough.
Between manufacturing difficulties and the regular Galaxy S6 seeing stiff competition from Apple's iPhone 6 and iPhone 6 Plus, plus aggressive competition from Chinese manufacturers in the low end, Samsung saw a profit decline for its fifth consecutive quarter.
In particular, Samsung's mobile division saw a 38 percent decline in operating profit to 2.76 trillion won (around $2.35 billion in U.S. currency). And though it expects a rise in smartphone shipments going forward, the company plans to reduce the price of its flagship Galaxy S6 and Galaxy S6 Edge devices.
Samsung's financial situation underscores how brutal the mobile market is. At the same time, Samsung demonstrated an ability to renew interest in its Galaxy series, there's just little room for error (such as manufacturing shortfalls).
