Samsung announced its quarterly earnings today, and as a result of disappointing sales numbers from this year’s flagship Galaxy S6 and S6 edge launch, says it will drop the price of the two phones.
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Samsung Electronics has reported an 8 percent year-on-year drop in its net profit, from 6.25 trillion won ($5.4 billion) down to 5.75 trillion won ($4.9 billion).
The company will now be seeking to recoup losses by cutting the price of the Samsung Galaxy S6 and the S6 Edge. The firm said its mobile division will launch new larger-screen phones in the third quarter but may not be able to improve earnings.
Samsung’s global marketing campaign for its high-end Galaxy S6 series has failed to spark an immediate surge in demand for the smartphone after its sales fell short of expectations.
At a separate board meeting, Samsung also doubled interim dividend to 1,000 won per share.
Operating profit at the mobile phone unit is at 2.76 trillion won, down from the 4.42 trillion won a year earlier, according to Bloomberg.
“The Mobile Business plans to firmly maintain sale of premium smartphones by flexibly adjusting the price of the Galaxy S6 and S6 edge, and launching a new model with a larger screen”, the statement said.
Although the new S6 Edge delivered a new design as promised, it did not translate into revenue for the smartphone maker as expected.
Although the anti-merger camp lost the final vote, its muscular campaign marked a watershed moment for shareholder activism in South Korea, where family-run conglomerates, or “chaebol”, like Samsung dominate the economy and are used to running their businesses with minimum investor interference. Apple’s comeback in to the market with popular iPhone 6 and 6 Plus along…
“China is becoming a problem child for Samsung that it needs to fix”, said Neil Mawston, executive director of research firm Strategy Analytics. However, smartphone shipments were still down compared to the previous quarter, as the S6 could not offset slower sales in the low-end and mid-range markets.
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The company is scheduled to hold an event on August. 13 in New York city, bringing forward its usual product launch schedule by one month.
