Samsung Forecasts 4 Percent Profit Decline Following Galaxy S6, S6 Edge Debut

The mobile business is a brutal one, even for a tech giant like Samsung. On Tuesday, the South Korean handset maker announced its earnings guidance for the second quarter of 2015, forecasting an operating profit of 6.9 trillion won (around $6.1 billion in U.S. currency). That's 4 percent below what it was in the same period a year go and well below the 7.2 trillion figure that most analysts had predicted before cutting their forecasts yesterday.

Even with the launch of new flagship phones in the Galaxy S6 and Galaxy S6 Edge, Samsung's sales are down 8 percent year-over-year to 48 trillion won. Sales of the regular Galaxy S6 just haven't lived up to expectations, and while the Galaxy S6 Edge is proving popular with its curved display that wraps around both sides, manufacturing difficulties have led to problems keeping up with demand.

Galaxy S6 Edge

KB Securities analyst Lee Ka-keun tells the AP that "the failure to manage the initial shipment for the Galaxy S6 series is the primary reason" for disappointing sales, adding that "demand for smartphones and other IT products were also weak."

There's a ray of hope for Samsung. Despite yet another quarter of sales declines (now at seven in a row), it's still the world's top smartphone maker. However, it has to get its production under control -- Samsung's market share declined in Q2, and going forward, it continues to face stiff competition from Apple in the high-end and Chinese manufacturers in the low-end.