Tech Talk: Is Samsung's Galaxy S7 Bet Paying Off?

Just last week, South Korea’s Samsung Electronics came out with its earnings guidance for Q1, 2016, which revealed that the company is expecting a pretty robust set of numbers, including 49 trillion won ($42.3 billion) in sales and 6.6 trillion won ($5.7 billion) in operating profits. Both those numbers represent gains over the company’s 2015 numbers for the corresponding quarter, when the company had reported consolidated revenues of 47.1 trillion won ($40.7 billion) and operating profits of 5.98 trillion won ($5.24 billion). While all of that may seem to indicate that Samsung's financials are headed the right way, the company made a strategic decision earlier in the year which arguably helped it beef up some of those numbers compared to its results from the same period last year.

Unlike every previous year, Samsung launched its latest Galaxy ‘S’ series smartphones, the Galaxy S7 and Galaxy S7 Edge, in March instead of April, allowing itself a little more time before Apple comes out with its iPhone 7 and iPhone 7 Plus later in the year. While shifting the launch day by a few weeks here and there may or may not seem like that big a deal for regular consumers, it is a pretty big deal if you happen to be a publicly-listed company, because that allows you to claim better sales in a given quarter, thereby raising the stock price, which keeps investors happy. In what may turn out to be a master stroke from the Samsung management, opening up its Galaxy S7 and S7 Edge sales in the first quarter itself has now allowed the company to count the initial sales of the two devices in the Q1 figures unlike in previous years.

However, Samsung’s expected impressive result in Q1 is not just a technicality, as the company has reportedly done significantly better with its latest offerings in purely sales terms than it did with the Galaxy S6 and S6 Edge during the initial period last year. With large sections of the tech media giving a resounding thumbs-up to the two devices, reports have indicated that during the first twenty days of sales, Samsung has been able to shift as many as nine million units of the Galaxy S7 duo, which is an order of magnitude higher than the company’s last-gen flagships, only three million of which were sold during their first twenty days of general availability.

There are also other factors at work for the Galaxy S7 line doing better that their predecessors. Firstly, the company priced the devices a tad lower than the S6 duo in many markets, but probably even more importantly, unlike last time, the company was able to gauge market sentiments and manufacture the 'Edge' variant in large enough quantities; something that it just did not do the last time around. It isn't exactly a state secret that inspite of being the pricier of the two, the 'Edge' has seen strong demand in most markets around the world, thanks to the the novelty factor for the most part. Samsung will be hoping that the uptrend will continue in the coming months as well, at least until it’s time for the company to launch the sixth-generation Galaxy Note later this year.

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About the Author

Kishalaya Kundu

Senior Staff Writer
I've always been a tech buff and have been building my own PCs since as far back as I can remember. My first computer was a home-built desktop running MS-DOS on which I learnt to program in GW-BASIC and my interests apart from technology include automobiles and sports.