14 DAY TRIAL // It has become common knowledge that Samsung is in big trouble after the last few financial quarters when the company’s profits dropped considerably.
One of the reasons would be the inability of the South Korean handset maker to innovate, but also due to the fierce competition in the Chinese market where Samsung’s share is now being eaten by local OEMs like Xiaomi, Meizu, Huawei and even ZTE.
Another reason Samsung’s profits dropped so much in the last couple of quarters was the low sales of its Galaxy S5 flagship smartphone.
Well, we knew that Samsung would sell less Galaxy S5 units from the moment the smartphone was announced and the company confirmed its specs, look and price tag.
There were absolutely no innovations added that would make a customer looking for a top-tier handset want to grab the Galaxy S5. Even so, Samsung still sold quite a lot of Galaxy S5 smartphones in the first three months since it was released on the market.
According to a report from Wall Street Journal, Samsung sold around 12 million Galaxy S5 units from April to July, which is 40% less than the previous model in the series, the Galaxy S4.
Apparently, Samsung ordered 20% more Galaxy S5 units then Galaxy S4 devices, and was expecting to sell this amount in the first 3 months. Its expectations were based on a survey of its carrier partners across the globe, which sent wrong predictions for the demand of the Galaxy S5.
Samsung Galaxy S5 sales were stronger than expected in the US
Moreover, the current Co-CEO and leader of Samsung’s mobile division, Mr. J.K. Shin did not want to question these off the charts projections, which were clearly unreal.
This led to additional costs that Samsung had to pay in order to unload the remaining devices that were piling up in Samsung’s warehouses.
The same report claims the only country where Samsung managed to sell more Galaxy S5 units than its predecessor, which was considered very popular, was the United States.
In contrast, Samsung Galaxy S5’s sales in China were down 50% from that of the Galaxy S4 during the first 6 months of its availability on the market.
With morale beaten down, Samsung is now preparing to announce its next flagship smartphone in the Galaxy S series. However, by the time the Galaxy S6 goes official, Samsung’s mobile division might be led by someone else other than Mr. J.K. Shin, according to sources familiar with the company’s restructuring plans.
