Samsung is not new to almost any avenue of electronics, as it is truly one brand that can make the claim of been there done that. However, things have not been going smoothly for the Asian giant, as its major share in the smartphone industry has seen a drop. After last year’s debacle of the Samsung Galaxy S5, Samsung bounced back and made it to the latest handheld news headlines with the Galaxy S6 this year, a flagship that was much appreciated and lauded for its excellent look and features. Yes, this phone came with the latest smartphone specifications and yet, Samsung claims that the S6 performed below expectations as sales figures didn’t reach the heights Samsung had hoped for. Samsung’s profits fell 8% this quarter in a year on year analysis, spurring Samsung do go into damage control mode.
Thus, in a bid to bolster smartphone sales, Samsung is now slashing prices of its high end S6. This is clearly a desperate attempt by Samsung to help improve the profits margin for the next quarter, which will hopefully be strengthened with the release of the much anticipated Note 5. The biggest mistake that Samsung made with its two flagship handsets this year was the excessive marketing, which ate into the profits that were needed to breakeven in the first place. Samsung flashed the S6 and S6 Edge on every advertising avenue possible, highlighting the fact that these devices came with the latest smartphone specifications, leading a deficit in profits even before the release of the phones.
Also, while the sales of the S6 were disappointing, the supply of the uber cool S6 Edge was actually lesser than demand. Samsung had a tough time trying to meet the demand requirements of the S6 Edge, a premium phablet that came in minimal quantities. Thus, despite the exorbitant price tag of the S6 Edge, its demand was much more than anticipated, a move that Samsung grossly misjudged, leading to botching up an opportunity that could have done wonders for the profit margin of this quarter.Samsung has lots of reasons to worry. Once upon a time, Samsung’s biggest problem used to be Apple, who would eat into its lucrative Asian market share. However, last year Xiaomi beat Samsung to become the highest sold Asian smartphone in China. The fact that according to the latest handheld news sources, Huawei became the third largest manufacturer of smartphones in the world this year, further doesn’t bode well for Samsung.
Hence, Samsung really needs to pull up its socks and look at what options it still has in its hands to increase its profits in the coming two quarters. Unless Samsung really manages to turn things around in the coming months, sadly, things look bleak for the Asian giant.
KnowYourHandheld 