Samsung Galaxy S5 Misses Sales Targets, Disappoints Korean Securities Firms

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Samsung has most likely missed its own Galaxy S5 smartphone quarterly shipments by 25 percent, and local securities firms aren't happy. Samsung expected to ship 21 million units, but instead will come in around 15 million -- and that means the electronics maker sold even less because units shipped doesn't equal units sold.

Analysts sour on Samsung over missed Galaxy S5 shipment goalsAnalysts sour on Samsung over missed Galaxy S5 shipment goals

Analysts had expected the Galaxy S5 to give Samsung's smartphone sales a big boost, but that hasn't been the case. With declining faith in Samsung's ability to compete with the iPhone and other smartphone makers, analysts are becoming more critical of the company.

Shipping 15 million Galaxy S5 units in a single quarter may seem like a big number, but that's chump change compared to Apple. Apple reported selling -- not shipping -- 43.7 million units during its second fiscal quarter, coming in at more than double the number of Galaxy S5 units Samsung shipped.

Korean securities firms have lowered their quarterly profit estimates for the company down to US$7.7 billion on the low end and $8.8 billion on the high end, according to Patently Apple. A big part of the blame for the lower estimates stems from Samsung's IT and Mobile Division. The division accounts for more than 60 percent of Samsung's profit, and with sharply declining smartphone and tablet shipments, it's accounting for a big part of the loss, too.

In a note to investors, HI Investment & Securities analyst Song Myung-sup said, "According to our forecast, smartphone and tablet PC shipments have fallen at least 10 percent and approximately 20 percent from the preceding quarter, respectively."

The company's strong suit right now sits in its DRAM and NAND flash memory sales, much of which is still going to Apple.

Samsung hasn't been able to drive up demand for the Galaxy S5 to the level it had hoped, and now other smartphone makers are gaining traction on the company's South Korean home. Lenovo, Huawei, and ZTE are all eating into Samsung's South Korean marketshare and are have their eye on chipping away at its international marketshare, too.

Missing quarterly targets doesn't spell the end for Samsung, but it is a big warning to the company: Find new ways to differentiate from Apple and other smartphone makers, or face even bigger marketshare losses.

Comments

mrboba1

Well, we kinda knew it would be bad when they started out with a BOGO offer for this phone.


Aside:
Those curved TVs look pretty nice though. I didn’t think it would be a big deal, but in the store, I preferred watching on them over a similar screened flat one.

geoduck

  Find new ways to differentiate from Apple and other smartphone makers, or face even bigger marketshare losses.

The simplest way to differentiate themselves from Apple would be to STOP COPYING EVERYTHING APPLE DOES.

mjtomlin

@mrboba1: “Those curved TVs look pretty nice though… preferred watching on them over a similar screened flat one”

They’re fine when you’re sitting at a decent angle, but because of the curve, the viewing angle is much worse than a flat TV. They’re a gimmick, there is nothing better about having a curved screen, unless you’re sitting 2 feet in front of it and can “feel” the screen wrap around your field of vision, giving you a much more immersive experience.

mrboba1

True, I suppose. I thought it was gimmicky before I saw them too, and I wasn’t too far away from them when I checked them out.

I definitely wasn’t “normal” watching distance away.

Constable Odo

How can Samsung continue to have high sales of their flagship smartphone quarter after quarter?  Samsung sells every type of smartphone under the sun and most users are probably buying some mid-range smartphone.  The smartphone market is stuffed to the gills.  The Galaxy S4 was about as much as any but the most nerd-type user even needed.  The S5 could have been called the S4S because it wasn’t that much of an upgrade.  Besides, consumers with 2-year carrier contracts shouldn’t be buying a new smartphone every year.

mrmwebmax

+

Spot on, geoduck.

As for the image, that poor kid is used so much here at TMO I think he’s become the infant equivalent of “the agony of defeat.”

mhikl

I usually like small people but that one I’d like to wallop.
Maybe its just the company he’s associated with.

“The company’s strong suit right now sits in its DRAM and NAND flash memory sales, much of which is still going to Apple.”—Not for long we hope.

‘Short sight hurts long term gains’
  a mantra forgot by the greedy.
When the time a comes,
And the lemmings run—
The tears will be quite seedy.

I have a stratagem for Sam. Focus more on refrigerators.

wab95

Jeff et al:

I cannot say with as much confidence with respect to my European and UK contacts, but amongst my associations in the USA, there is gathering disenchantment with Samsung and their business practices, specifically with their perceived theft of American IP - and not just amongst Apple customers.

Just in the past 6 weeks, I have personally been in several conversations when the issue of Samsung has come up, and in many if not most of these, there has been a chorus of negative comment levelled at the convicted IP thief, with more than one person saying that they have ceased purchasing anything from the company.

Given the relative size of their US market, the negate perception of Americans around the issue of theft of American home-grown IP is something the Korean concern can no longer safely ignore, and should do all they can to redress.

RonMacGuy

LOL, Constable.  Sounds like a lot of excuse-making to me.

How can Samsung continue to have high sales of their flagship smartphone quarter after quarter?

Apple does.

 

RonMacGuy

Very good, wab95.  I truly hope more Americans do rally against Samsung, not in light of being anti-global or anti-Korean, but in light of IP theft of American companies.  The word needs to get out!!

wolofterrain

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Danny Kim

Non-Koreans should know that Samsung has committed the same kind of theft of Korean company’s intellectual property in addition to American companies.  They are an unethical company that has a history of stealing IP from smaller companies that cannot challenge them in court.  Recently, I’m hearing that they are trying to patch things up with Apple, so that their supplier relationship can continue.  Looks like they finally met their match.

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