This is definitely not going to be a great year for Samsung, as far as their Mobile branch goes at least. The company has experienced significant profit drops in the last couple of quarters and their management staff received salary cuts, significant ones, especially J.K. Shin whose salary was cut over 50% in Q3. All in all, Samsung decided to shift things around lately due to everything, it will be interesting to see what can this Korean giant do in order to get back on the right path.
Anyhow, a new report by Wall Street Journal says that Samsung’s flagship, the Galaxy S5, sales are going far worse than expected. The report says that Samsung sold “only” 12 million units of their flagship handset in its first three months on sale, which is about 4 million less than its predecessor. This also means Samsung has sold 40% fewer devices than they expected / projected, which are of course awful news for the company. Sales are down over 50% in China while the company managed to increase sales in the US (only), the US is also Samsung’s biggest market. The company has reportedly overestimated how much Galaxy S5 stock would be needed and now they have tons of units sitting in warehouses waiting to be shipped out. Samsung increased their advertising budget in order to try to push consumers into buying that device.
If you recall, Samsung promised to “reform” company’s smartphone portfolio in order to get back on the right path and stop dropping market share. We’ve also reported recently that Samsung’s co-CEO, J.K. Shin, might step down soon and let someone else take over. Samsung’s chairman, Lee Kun-hee, has been ill for quite some time now and his son is getting ready to take over the company, we’ve reported on it extensively recently.
Samsung is in the middle of serious problems at the moment, Samsung Mobile that is. The company got used to increasing its presence on the market over the last couple of year and this came in as a true shock for them. Smartphone sales are way down and they’re experiencing constant profit drops, what can they do in order to regain lost market share and stop bleeding money? Do you think that the Galaxy S6 will be a device which will get Samsung back on the right path?