Samsung has announced that Samsung Galaxy S6 and S6 Edge will be experiencing a big price drop following a disappointing sale of it flagship units.
With Samsung Galaxy Note and a bigger S6 Edge rumored to be announced on August 13, its clear the Samsung is taking another direction towards its profit-making plans.
Fifth profit decline
According to Bloomberg, Samsung has posted its “fifth straight profit decline.”
The net income dropped to “5.63 trillion won ($4.9 billion) in the three months ended June, missing the 6 trillion-won average of estimates.”
The report further mentioned that Samsung failed to anticipate the demand for the three-sided phone and failed to produce enough units to meet this demand.
Yoo Eui Hyung, an analyst with Dongbu Securities Co. in Seoul, observed that Samsung failed to shake the Apple brand loyalty among customers, ending up just as one of the Android phones out there.
Bloomberg further reported that “(s)hares of Samsung fell 3.1 percent to 1,224,000 won as of 12:24 p.m. in Seoul. The stock has lost 7.8 percent this year, compared with a 5.9 percent gain in the Kospi index.”
The next answer of Samsung? Create more middle and lower-priced phones.
Park Jin-Young, vice president of mobile communications, said that “(i)n order to drive up the shipment, we will actively respond to the market, which could have a negative impact on our average sales price. There’s a possibility that the third-quarter sales price could slightly drop versus the second quarter.”
Though still the second top seller of smartphones, Samsung’s failure to supply the demand for Samsung S6 Edge will take a toll on the Company, according to Reuters.
Overall, however, the Company’s semiconductor business is booming, offsetting the loss of its mobile division.
Samsung has announced its release of the new Galaxy Note model. Everyone will surely be on the lookout for its performance in the market.