NEW DELHI: Samsung is planning to cut prices of its flagship smartphones Galaxy S6 and Galaxy S6 Edge. Making the announcement during its earning call, the company said that it would cut the price of the two phones in order to “maintain” momentum.
The company, however, did not reveal the amount of the price cut and also by when would the price cuts come into effect. Also, though there are no region-specific details available it is but logical that price cut will be announced in India too as the sales of Samsung’s flagship devices have been below target across the globe.
Samsung reported Thursday a fifth straight drop in quarterly earnings as the Galaxy S6 failed to reverse it’s declining fortunes in the smartphone industry.
The company’s overall earnings drop during the April-June quarter was 8% but it reported a much bigger decline of 38% in the mobile division’s income. The sharp profit drop in the mobile business came despite its ambitious start to the quarter with the launch of two flagship smartphones: The Galaxy S6 and the S6 Edge featuring a curved side display.
“Total sales of the S6 and S6 Edge during the second quarter were below expectations,” Park Jinyoung, a vice president at Samsung’s mobile communications team, said on a conference call.
The decline in the mobile profit was smaller than the previous quarter’s nearly 60% plunge, but it extended the mobile division’s losing streak. Samsung’s sky-high growth in the smartphone industry came to a sudden stop in 2013 as bigger iPhone models lured buyers from Samsung phones and Chinese phone makers squeezed its sales in China.
Samsung’s April-June net income was 5.8 trillion won ($5 billion), down 8% from 6.3 trillion won a year earlier. A FactSet survey of analysts predicted 5.6 trillion won of net income.
Sales fell 7% over a year earlier to 48.5 trillion won while operating income dropped 4% to 6.9 trillion won, in line with its earnings preview earlier this month. It generated 2.8 trillion won operating income from the mobile business compared with 4.4 trillion won a year earlier.
The only bright spot came from sales of components powering smartphones. A robust performance at its semiconductor department helped narrow the overall profit decline. Operating income from its semiconductor division surpassed the 3 trillion won mark for the first time in several years.
Market research firm IDC said Samsung, still the world’s largest maker of smartphones, was the only top five smartphone vendor that lost market share during the second quarter, falling to 22%, from 25% a year earlier.
