Samsung announced and released the Galaxy S6 family earlier in the year. Originally, the Galaxy S6 and S6 Edge were released, followed by the S6 Active more recently. Of the two original devices, there are only a small number of differences between the Galaxy S6 and S6 Edge – chief amongst them is the design, which sees a metal and glass construction used for both but the S6 Edge has curved glass edges compared with the rather more pedestrian and conventional S6 sides. At the time, Samsung estimated that only one Galaxy S6 Edge would be sold for every four Galaxy S6 devices owing to the increased cost of the Galaxy S6 Edge compared with the ordinary S6. Samsung are due to release earnings and profit figures for the second quarter later this month but have today released the earnings guidance and unfortunately, it is not good news.
According to the guidance released today, Samsung are expecting to see a straight seven profit decline. The company expects sales of KRW 47.1 trillion and an operating profit of KRW 6.0 trillion for the second quarter, ended on June 30. This is a drop of around 4% compared with the same period last year – although the rate of reduction is much smaller in 2015 compared with 2014, which had seen a fall of over 30% compared with 2013. These sales figures include the Galaxy S6 models, which despite being considered amongst the very best of what the smartphone industry has to offer customers in 2015, have not entirely sold according to Samsung’s one in for plan. Now, it appears that Samsung have a surplus of the conventional Galaxy S6 model lying in warehouses around the world, especially the white one, and has failed to meet customer demand for the S6 Edge. It appears that customers would rather wait for the S6 Edge to come back into stock rather than settle for the Galaxy S6.
J K Shin, Chief Executive Officer for Samsung Mobile, has pledged to boost the production of the Galaxy S6 Edge but the business was facing difficulties because of the new manufacturing process being difficult, time consuming and expensive. A new manufacturing plant has been established in Vietnam and at the time, the business was expecting to have enough manufacturing capacity by the end of the second quarter. This should, hopefully, push profits and sales figures along as we go into the third quarter, but it’s in the second half of the year that Samsung’s Galaxy S line does not sell so well as people start to wait for the Galaxy Note or the new Apple iPhone model.