Worries about sales of Samsung's Galaxy S6 temper investor expectations ahead of earnings

Posted:
in iPhone edited July 2015
Korean investors have begun to back off their formerly hopeful predictions that Samsung's updated flagship Galaxy S6 smartphone could mitigate the conglomerate's recent financial freefall, thanks to seemingly lackluster sales of the new handsets.




"After the first-quarter results the consensus for second-quarter earnings was somewhere in the high 7 trillion won ($6.2 billion), but now I think so long as the first digit doesn't start with a six it won't be a shock," HDC Asset Management fund manager Park Jung-hoon told Reuters. Samsung is expected to announce its second-quarter earnings guidance on Tuesday.

Some 20 of the 39 investment analysts surveyed by Thomson Reuters say that they have reduced their second-quarter Samsung forecasts within the last 30 days. The ongoing economic woes in Europe are a factor, as are reportedly constrained supplies of the more expensive S6 Edge.

Despite the revisions, analysts still believe that Samsung will guide operating profit above $7 trillion won, with a full-year profit of 27.8 trillion won in 2015. That would represent a sizable increase from the 5.98 trillion won operating profit the company posted for its first quarter.

Though Samsung has numerous and diverse interests in everything from heavy industry to household appliances, its mobile division has become its core business in recent years, and the division's slide has dragged the company down in the midst of a generational leadership change. Declining sales of high-volume, low-cost feature phones coupled with an explosion in popularity for Apple's iPhone and "white box" competitors out of China have driven South Korea's largest company into a pit it is just beginning to emerge from.
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Comments

  • Reply 1 of 74
    tylerdtylerd Posts: 33member
    I will not be surprised by disasterous statistics. I moved to Seoul in March and have been quietly looking out for Galaxy Edge phones everywhere that I go, including metro train. I saw my first Galaxy Edge last week. Here in Seoul. Everyone seems to be buying cheap samsung and LG devices, as well as a significant number of iPhones, including many 6 and 6 Plus.

    Results will be interesting...
  • Reply 2 of 74
    rogifanrogifan Posts: 10,669member
    And yet Deutsche Bank claims iPhone growth will underperform in 2016. :rolleyes:

    http://finance.yahoo.com/news/deutsche-bank-cautions-apple-iphone-122819905.html
  • Reply 3 of 74
    boredumbboredumb Posts: 1,418member

    They're already giving away tablets to get you to buy them...

    how much more do you need to know?

  • Reply 4 of 74
    ronmgronmg Posts: 163member

    What goes around, comes around. Samsung has alienated those die-hards by (a) making it look so much like an iPhone it isn't funny, and (b) designing in all those things that Samsung fans have so often criticized Apple about, like non-replaceable batteries. Samsung will continue to decline in relevance, which makes me very happy.

  • Reply 5 of 74
    radarthekatradarthekat Posts: 3,335moderator
    The S6 and S6 Edge are pretty enough (well, they are based on Apple designs), but Samsung made the fatal error of pricing them on par with the latest iPhone models. With similar prices, similar physical appearances to the iPhone, non-replaceable batteries and non-extendable storage, like the iPhones, consumers are left to compare and contrast based upon other factors; security, ecosystem, real-world performance, status, etc, Small wonder the Samsung phones aren't selling. Tim Cook must be thrilled that Samsung continues to focus their energies and resources on copying the now insignificant aspects of the iPhone, such as physical form. It shifts the comparison precisely to those aspects that are of most significance in real-world use and where Samsung cannot possibly hope to compete.
  • Reply 6 of 74
    cnocbuicnocbui Posts: 3,613member

    Samsung must be really worried.

     

    Quote:


      

    Kantar: Samsung top US vendor, S6 third best-selling smartphone


    30 June, 2015

    Samsung is regaining lost ground in the US with the Galaxy S6, according to analysts at Kantar. It helped its parent company restore its position as the top smartphone vendor in the country. The Galaxy S6 is now the third best-selling smartphone in the US after the iPhone and the Galaxy S5.

    This comes at a time where iOS is declining slightly, during the three month period that ended in May it's down about 2.4 percentage points compared to the same period last year, while Android and Windows Phone split its share and that of the almost gone "Other" category.



    http://www.gsmarena.com/kantar_samsung_top_us_vendor_s6_third_bestselling_smartphone-news-12856.php

  • Reply 7 of 74
    Quote:

    Originally Posted by cnocbui View Post

     

    Samsung must be really worried.

     

    http://www.gsmarena.com/kantar_samsung_top_us_vendor_s6_third_bestselling_smartphone-news-12856.php


     

    Kantar numbers are terrible.  They are based on consumer surveys.

     

    Comscore is the definitive source in the industry.  They combine surveys with real analytics.  

     

    http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-May-2015-US-Smartphone-Subscriber-Market-Share

  • Reply 8 of 74
    rogifanrogifan Posts: 10,669member
    The S6 and S6 Edge are pretty enough (well, they are based on Apple designs), but Samsung made the fatal error of pricing them on par with the latest iPhone models. With similar prices, similar physical appearances to the iPhone, non-replaceable batteries and non-extendable storage, like the iPhones, consumers are left to compare and contrast based upon other factors; security, ecosystem, real-world performance, status, etc, Small wonder the Samsung phones aren't selling. Tim Cook must be thrilled that Samsung continues to focus their energies and resources on copying the now insignificant aspects of the iPhone, such as physical form. It shifts the comparison precisely to those aspects that are of most significance in real-world use and where Samsung cannot possibly hope to compete.

    Seems to me the only people who were bothered by the fact that Samsung's phones were plastic were tech sites like The Verge. The tech media pushed this meme that Samsung's woes were all due to plastic phones and TouchWiz. But that's BS. Samsung's problems are no brand loyalty and no ecosystem stickiness. They became successful in the smartphone market because they correctly realized people wanted larger screened phones. And they spent billions on marketing going after Apple and promoting the Galaxy brand. Sure it got play in the tech press as they love fanboy wars as they bring page views. But for all the money Samsung spent they still don't have people loyal to the brand. Once Apple came out with larger screen phones and OEMs like Xiaomi and Huawei made decent enough Android handsets for cheap Samsung was doomed. Aluminum frames and chamfered edges aren't going to solve Samsung's problems. Tizen won't either as Windows Phone shows consumers are perfectly fine with the current duopoly with smartphone OSes.
  • Reply 9 of 74
    rogifanrogifan Posts: 10,669member
    Kantar numbers are terrible.  They are based on consumer surveys.

    Comscore is the definitive source in the industry.  They combine surveys with real analytics.  

    http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-May-2015-US-Smartphone-Subscriber-Market-Share

    What analytics? If companies aren't providing sales figures how are they coming up with these figures. How do we even know what the total market is to be able to assign share?
  • Reply 10 of 74
    Well well, Samsung is free falling because the quality of their phones it is not well joint to the price they sell, i had my first samsung SIII and i have many issues one is the speed of any task i make, so slow that neither a model cheaper does and the battery does not last even a year and after six month is out o warranty can you imagine I spend 450 euros for that mobile phone. Samsung does a lot of advertise but if your products suck they suck and sooner or later customers will choose others. Evidently loyalty was never a issue for samsung. I went to a shop and try the S6 no way it is so slow for the things it packs that i would never buy it. Wake up samsung your policy is wrong.
    A samsung buyer very deluded

    Next phone Lg bye bye samsung
  • Reply 11 of 74
    ericthehalfbeeericthehalfbee Posts: 4,244member
    Quote:

    Originally Posted by cnocbui View Post

     

    Samsung must be really worried.

     

    http://www.gsmarena.com/kantar_samsung_top_us_vendor_s6_third_bestselling_smartphone-news-12856.php


     

    Did you even read that Kantar article?

     

    The Galaxy S5 from last year is OUTSELLING the Galaxy S6 from this year. How can anybody spin this as a positive for Samsung?

     

    Even worse, although Samsung holds #2 and #3, combined they aren't even close to the #1 selling iPhone. This isn't a photo finish between 3 top devices. This is a slaughter by the iPhone with the S5 and S6 fighting over table scraps.

  • Reply 12 of 74
    Quote:
    Originally Posted by cnocbui View Post

     

    Samsung must be really worried.

     

    http://www.gsmarena.com/kantar_samsung_top_us_vendor_s6_third_bestselling_smartphone-news-12856.php

     

    ".....The Galaxy S6 is now the third best-selling smartphone in the US after the iPhone and the Galaxy S5."

     


     

    If it ever came out that Apple's current phone lineup was being outsold by the previous generation's lineup, people would be calling for Tim Cook's head.

  • Reply 13 of 74
    ericthehalfbeeericthehalfbee Posts: 4,244member
    Quote:

    Originally Posted by Rogifan View Post





    What analytics? If companies aren't providing sales figures how are they coming up with these figures. How do we even know what the total market is to be able to assign share?

     

    Apple provides sales figures. Everyone else is afraid to. So they have to guess Android sales.

  • Reply 14 of 74
    iqatedoiqatedo Posts: 1,701member
    Quote:
    Originally Posted by RonMG View Post

     

    What goes around, comes around. Samsung has alienated those die-hards by (a) making it look so much like an iPhone it isn't funny, and (b) designing in all those things that Samsung fans have so often criticized Apple about, like non-replaceable batteries. Samsung will continue to decline in relevance, which makes me very happy.




    Exactly. This is the problem that Samesung has created for itself, having emulated Apple's product inside and out, what now to differentiate it? Not the operating system, services, functionality... why buy second best, which a copycat can only hope to be.

  • Reply 15 of 74
    Quote:

    Originally Posted by Rogifan View Post



    And yet Deutsche Bank claims iPhone growth will underperform in 2016. image



    http://finance.yahoo.com/news/deutsche-bank-cautions-apple-iphone-122819905.html

    Douche Bank already has an Apple target price of $125, so they've been underwater for sometime.  As far as they're concerned, Apple has no future at all as the iPhone is Apple's go-to revenue stream.  Every quarter Apple has to go up against these people who constantly claim iPhone sales can no longer grow.  Tim Cook said that only 20% of iPhone users have upgraded so there are still plenty of consumers who theoretically can upgrade.  Supposedly the iPhone upgrade cycle is too long, they say for Apple to survive, yet they're so hot on Tesla but how often are Tesla owners going to upgrade and how many are going to be buying Teslas in the first place.  A two-year iPhone replacement cycle is shorter than almost any other consumer device you could care to name.  That relatively short replacement cycle should drive revenue for a long time.  These analysts always have reasons to downgrade Apple but those reasons are never used for other companies.

     

    I don't know how Apple always seems to get into these markets that are supposedly so easily glutted.  Consumers could gradually stop buying Android smartphones and start buying iPhones for all we know.  That would be growth.  Apple is still building new retail stores so there must be some demand for all of Apple products but Douche Bank thinks Apple's iPhone sales will be dead in the water in 2016.  If Apple is dead then I'm sure a lot of other companies will be dead, too.  I'm certain if Apple continues to deliver high-quality products with good customer service and customer-based iOS services like Apple Pay and AppleMusic, Apple should easily thrive.

  • Reply 16 of 74
    kpomkpom Posts: 653member
    Quote:

    Originally Posted by cnocbui View Post

     

    Samsung must be really worried.

     

    http://www.gsmarena.com/kantar_samsung_top_us_vendor_s6_third_bestselling_smartphone-news-12856.php




    If the S6 is being outsold by the S5, that probably does worry Samsung, since the S5 has a lower selling price.

  • Reply 17 of 74
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by slickdealer View Post

     

     

    Kantar numbers are terrible.  They are based on consumer surveys.

     

    Comscore is the definitive source in the industry.  They combine surveys with real analytics.  

     

    http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-May-2015-US-Smartphone-Subscriber-Market-Share


     

    AI and DED basing a full article on Kantar numbers:  http://appleinsider.com/articles/13/11/04/apples-ios-takes-phone-sales-share-in-us-australia-prior-to-iphone-5s-launch

     

    The acceptability of market information seems to be directly proportional to how positive it is towards Apple or how negative it is towards Samsung.

     

     

  • Reply 18 of 74
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by KPOM View Post

     



    If the S6 is being outsold by the S5, that probably does worry Samsung, since the S5 has a lower selling price.




    That is likely true, but  if they are making as much profit per unit with the S5, that would be some consolation to them I would imagine.  I suspect there would be some other manufacturers who would love to have that particular 'problem'

  • Reply 19 of 74
    gatorguygatorguy Posts: 22,827member
    sog35 wrote: »
    And there is a good reason for that.  Unlike Android/Microsoft/Google/Samsung - Apple does not pay these marketing firms a penny.
    All those other companies are paying Comscore or Kantar or whoever for favorable market reports? I don't ever remember seeing reliable mention of Google paying any of them, and don't really recall MS doing so either tho they might have. As for "Android" paying anyone for marketing that would be darn near impossible since there is no single "Android" entity. Now Samsung may be a different matter.
  • Reply 20 of 74
    tmaytmay Posts: 5,071member
    Quote:

    Originally Posted by cnocbui View Post

     



    That is likely true, but  if they are making as much profit per unit with the S5, that would be some consolation to them I would imagine.  I suspect there would be some other manufacturers who would love to have that particular 'problem'


    Speculation on your part that Samsung is making "as much profit per unit with the S5" as the S6, given that there are likely incentives to drive S5 unit sales, plus the lower price.

     

    At any rate, looks like we will have an answer on Samsung mobile profits tomorrow.

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