Samsung Galaxy S5 Misses Sales Targets, Disappoints Korean Securities Firms

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.