Samsung Forecasts 30 Percent Q1 2015 Profit Decline, Betting On Galaxy S6 For Adrenaline Shot
The next few quarters will be extremely telling for Samsung and its effort to turn around its mobile business. What the top dogs in charge are most interesting in finding out is whether or not the Galaxy S6 and Galaxy S6 Edge, due out this Friday, have the moxie to push Samsung's mobile profits in a positive direction.
So far, the signs are promising. Reviews around the web are mostly positive, and pre-order figures look solid for Samsung's flagship handsets. As the company's mobile marketing boss Lee Young-hee told The Wall Street Journal in a recent interview, the new handsets are "more design-focused than function-driven," and that decision has sparked renewed interest in a Galaxy line that seemed to grow stale with the Galaxy S5.
Hard numbers will tell how the story ends. In the meantime, Samsung said it expects operating profit to be around 5.9 trillion won ($5.44 billion) in the first quarter of 2015, which is a 30.5 percent decline compared to the same quarter a year ago, but up sequentially from 5.3 trillion won in the fourth of 2014. It would also rank as the highest profit in three quarters.
One thing working in Samsung's favor is the curved screen design of the Galaxy S6 Edge. Chinese manufacturers like Huawei and Xiaomi have been able to match the features of Samsung's previous handsets at lower price points, but with the curved edged display, Samsung is able to stay a step ahead the competition in China. It's also a distinguishing feature in the U.S. and other parts of the world.
Nevertheless, it's not a foregone conclusion that Samsung's mobile woes are suddenly solved. While initial reactions to the Galaxy S6 and S6 Edge have been mostly favorable, the premium design this time around comes at the expense of popular features like a removable battery and expandable storage via microSD, both of which are absent. The devices are also more difficult to tear into than previous Galaxy phones.