Slow Samsung Galaxy S5 sales led to a rough fourth quarter for Korean mobile giant Samsung. According to a January 29 report from the Inquirer, Samsung’s profits from its Mobile Division fell 62.4 percent. The company attributes the extreme drop in sales to Apple’s release of its own phablets, the iPhone 6 and iPhone 6 Plus, in September 2014.
Samsung predicted the drop in demand for its devices when it noticed that the Galaxy S5 sales were “40 percent slower than expected,” according to a Wall Street Journal report. The Samsung Electronics Co. Earning Release confirmed the prediction.
According to the release, Samsung’s Mobile Division experienced a “slight decline” in quarter-over-quarter smartphone shipments, but what Samsung calls a “slight decline” is really more like a drop of almost 50 percent. The drop in sales is despite the report boasting the following.
“Global expansion of Note4 · Tablet: Shipments increased QoQ with Tab4 sales growth – Efficiency of marketing expenses improved as inventory stabilized — Network: Revenue increased due to overseas carriers’ expansion of LTE network.”
That Earnings Release also shows that Samsung shipped only 95 million smartphones for the quarter, overall. That number is down from last year’s 188 million devices in the same quarter, and the global Note 4 tablet sales and tablet sales simply weren’t strong enough to make up for the decline.
Apple, on the other hand, broke its own sales records in a big way. According to an Apple press release, iPhone 6 and iPhone 6 Plus sold 74.5 million devices during its last quarter, which led to a record breaking $74.6 billion in sales, which resulted in $18 billion in net profit for the company.
Apple is not the only competitor to blame for the slow Samsung sales. Demand for Samsung’s flagship Galaxy S5 smartphone was down by about 50 percent over that of the Samsung Galaxy S4 in China, according to the Economic Times. This is in part because of Chinese phone maker Xiaomi, which is known for its Mi 4 mobile phone. China makes up a huge piece of smartphone sales in Samsung and other mobile companies.
“In the second quarter last year, Xiaomi overtook Samsung to become the biggest selling smartphone maker in China. Samsung now ranks third in that market, after Apple raced to the top in the fourth quarter, according to research company Canalys.”
Overall, while the reversal of Apple and Samsung smartphone sales may last a bit longer due to “short-term seasonality,” says Samsung, but the company predicts overall success for 2015 with its “new product portfolio.”
A number of rumors say the new product portfolio will include a Samsung Galaxy S6 device, which is rumored to feature a metal casing, Android Lollipop, and a “special feature,” according to BGR.
Android Lollipop is the newest iteration recently rolled out to a number of smartphone brands, including some HTC One M8 and Galaxy Note 3 devices, reports BGR. Even U.K. Galaxy S5 devices have received the update, says SamMobile, but unfortunately for U.S. Galaxy S5 users, there is still no official word as to when the Android Lollipop update will be pushed to their devices, though rumors say it will come sometime in the next two weeks.
[Photos courtesy Samsung Mobile Press and SamMobile via YouTube]