The world’s biggest smartphone maker saw its share in China slide to 8.6 per cent in the second quarter, from 9.8 per cent in the first quarter, according to IHS.
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The demise of its mobile unit is largely due to it falling short against Apple’s iPhone 6 in its high-end mobile device sales, in addition to the emergence of heavy competition in Xiaomi, Huawei and Lenovo in the mid-to-entry-level Chinese mobile market.
Hopes of a turnaround had largely been pinned on the sixth edition of its flagship smartphone launched in April.
The company revealed that it would be “adjusting” the price of the Samsung Galaxy S6 and the Samsung Galaxy S6 Edge in order to boost sales and profits.
Those new “premium models” likely refer to the upcoming Galaxy Note 5 and a new extra-large model, expected to be called the ‘Galaxy S6 edge+’.
Samsung attributed this growth, up 11.9 percent from 4.63 trillion won to 5.75 trillion won, to its semiconductor business and the launch of its new UHD TV models.
This was certainly reflected in the company’s latest quarterly financial results, which it published yesterday.
The company announced a mid-year dividend of 1 000 won a share compared with 500 won a year earlier. But the bigger story perhaps was the fact that the company reported disappointing smartphone sales, including that of its flagship smartphones, the Samsung Galaxy S6 and Samsung Galaxy S6 Edge.
On a sequential basis, both operating profit and revenue were up 0.7 percent over the previous quarter for the business unit.
Sales fell 7.29 percent on-year to 48.53 trillion won in the second quarter, and operating profit also dropped 4.03 percent to 6.90 trillion won.
The company also miscalculated demand for its curved-screen Galaxy S6 Edge phones, leading to a supply shortage that ate into profits.
“While the numbers are in line with what’s been expected, the real story is that Samsung used to be this huge industry giant, dominating the smartphone field”, explained Bryan Massachusetts, vice president of client research at IDC, in an interview with the BBC. Samsung sold 89 million handsets, with smartphones accounting for more than 80 percent of those. “There’s a possibility that the third-quarter sales price could slightly drop versus the second quarter“.
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The only bright spot came from sales of components powering smartphones.
