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SAMSUNG FORECAST A fall in second quarter profit in a sign that sales of its much anticipated Galaxy S6 smartphones failed to meet expectations.
Samsung on Tuesday estimated its second-quarter operating profit at 6.9 trillion won (€5.5 billion), down 4% from a year earlier. The result represents a 15% gain from the previous quarter but it was lower than the 7.23 trillion won forecast in a FactSet survey of analysts.
Sales declined 8% from a year earlier to 48 trillion won, falling short of the FactSet forecast of 52.8 trillion won. The South Korean company will release its full result for the quarter later this month.
When Samsung began sales of its Galaxy S6 and S6 Edge smartphones in April, there were expectations that the new flagship devices would lead a revival at Samsung’s handset business, which suffered a stunning decline last year.
It retained the title of the world’s largest maker of smartphones, but its market share declined, squeezed by Apple in the premium market and by Chinese companies in the low-end market.
Within Samsung, development of the Series 6 smartphones was dubbed “Project Zero,” signifying the company’s efforts to recapture the winning formula of its earlier phones.
Issues
Samsung was hit by two problems with its Galaxy S6 series. The regular version of the phone, the Galaxy S6, wasn’t as popular as expected, while the S6 Edge model, which features a display that curves on both sides that is more difficult to produce, couldn’t keep up with demand.
“The failure to manage the initial shipment for the Galaxy S6 series is the primary reason” for disappointing sales, said Lee Ka-keun, an analyst at KB Securities. “Demand for smartphones and other IT products were also weak.”
Samsung’s smartphone sales were also hit by a new law that was enforced in South Korea last year, which barred handset vendors from giving hefty subsidies to phone buyers. The measure has been a boon to Samsung’s rival Apple, whose iPhone sales in South Korea grew. Apple’s newest models also featured larger screens that were similar in size to the Samsung phones, removing one of Samsung’s advantages.
Counterpoint Technology Market Research, a market research firm, said last month that Samsung sold 6 million Galaxy S6 and S6 Edge smartphones by the end of April, selling at a faster rate than its 2014 predecessor model.
But the research firm said the chance of Samsung’s flagship models overtaking Apple’s iPhone 6 series was small due to production constraints for the curved glass.
Analysts have lowered profit forecasts for Samsung in recent weeks citing the weaker-than-expected sales of its flagship smartphones. Last month, Nomura Securities cut its estimate of Samsung’s smartphone shipments during the second quarter to 75 million units, down 11% from its earlier forecast. Other brokerages also cut their forecasts.
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“Roll up and see for yourselves how copy and paste works in journalism!”
@James Groden: watch as we delete all comments that don’t agree with our opinion and in some cases don’t allow comments at all!
Watch as we slightly reword Government press releases on various subjects where the public are told to get back in our boxes and do what we’re told and then turn the comment section off, because we don’t don’t want any dissenting voices.
Watch as we shut down the comment section when too many comments go against the narrative.. Breaking News! “Ten People killed in overnight raids in Gaza” Yea shut down comments on that one, as we don’t want People giving out about Israel.. Journalists my ar_se
In the past few weeks statements made by government Minister’s, the comment section has been closed. The taking down of comments that contain no personal or unacceptable comment but would have been critical of government have been removed. Bit hypocritical of the Journal.
@William slevin: respond to what? your mas ravings? No point. At this stage I pity you.
@establishment loyalist fascist lil joey:
I didn’t ignore it no offence I forgot about it…also its not a priority to reply to every reply you make to me which is alot…
But I think it was about the 70 year old assaulted in clare? I don’t know the circumstances of the assault but I’m guessing your employing it was done by anti mass immigration protestors….do you have proof of this? But let’s say it’s true I have no idea….I abhor violence against anyone unless its done for defensive reasons….if this 70 year old man was attacked by one of the protestors….then I would condemned such an attack as that infringes on the right of the 70 year old not to be assaulted for no reason…
So I would condemn such an attack
@William slevin: why willie and leave your mad raving influence others wrongly. Like your support for the protest in Clare….you know the one….I asked for your view of what happemed there on Sunday…and you ignored my question…..
Also you repeatedly ignore me asking you for proof of the false claim you keep making against me that I’ve incited hatred…well Where’s your proof…I want the comments and the articles where I supposedly incited hatred….
You haven’t so far because you can’t…because your a liar….
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