Samsung smarting from poor smartphone sales — Q2 profits fall 8pc

30 Jul 2015

Poor smartphone sales tore into Samsung's Q2 profits. The company plans to adjust pricing of its flagship S6 devices.

Korean electronics giant Samsung has reported its fifth straight year-on-year profit fall as poor smartphone sales saw an 8pc decline in profits in the second quarter.

Samsung reported a profit of 5.75 trillion Korean won (US$4.9bn), down from 6.25 trillion a year ago.

Overall sales were 48.5 trillion won (US$41.7bn), down 7pc on last year.

Operating profits slid 37.6pc to 2.76 trillion won.

Samsung tried to smooth over the tough operating conditions in the smartphone market by saying the overall drop in smartphone shipments was due to declining shipments of older middle-to-low end models.

Blunted S6 Edge?

The company released its flagship Galaxy S6 and Galaxy S6 Edge smartphones to much fanfare in April and said that supply difficulties associated with high demand and increased marketing spend to support the launch ate into profits.

“Despite the launch of Galaxy S6, improvement to earnings was quite marginal due to low smartphone shipments and an increase in marketing expenses for new product launches,” Samsung stated.

However, reading between the lines, it was quite telling that Samsung plans to increase the sale of Galaxy S6 devices by “flexibly adjusting the price” of the Galaxy S6 and S6 Edge.

It also confirmed it will be launching a new model Galaxy S6 with a larger screen – most likely a phablet device to take on the Apple iPhone 6 Plus.

Samsung also revealed that second quarter tablet shipments were down, in line with negative growth in the tablet market overall.

Overall, Samsung was boosted by strong sales in its semiconductor business and its consumer division benefited from the launch of new TV models.

Samsung Galaxy S6 at Mobile World Congress 2015 image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years