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Samsung's CFO says the financial outcome for Q2 is not good, Galaxy S5 and mid-to-low range phones to blame?

Samsung's CFO says the financial outcome for Q2 is not good, Galaxy S5 and mid-to-low range phones to blame?
Samsung's chief financial officer, Lee Sang-hoon, warned the company's investors that the financial situation during the financial Q2 of the year doesn't look “too good”, as profits are expected to go down. As a result, Samsung's stock price fell roughly 2% to $1,296.4 (1,320,000 KRW). Previous forecasts have already caused Samsung's shares to dwindle 8.5% down during the last month, and the CFO's statement added even more fuel to the fire. The reason for this unfortunate financial situation? Well, it seems that the culprit might be no other than the Galaxy S5 flagship and its sales.

Despite the numerous reports that the Samsung Galaxy S5 is selling pretty well both at home and in the US, the fierce competition from the likes of Sony, HTC, and LG has allegedly already undercut the sales of the latest Galaxy, thus decreasing Samsung's income. Additionally, KTB Investment & Securities, a Korean financial institution, blamed the company's expected not-so-great financial outcome mostly on weak demand for its low-end and mid-range devices.

It is predicted that Samsung might report year-over-year drop of its operating profits of roughly 16% and a general decrease of shipments by 12.5% - from 88 million to about 77 million units. These expectations already stray away from initial expert predictions that Samsung will ship more than 90 million units during Q2.

Samsung already experienced a slight loss of global market share during the first quarter of the year. The manufacturer's due to release its financial report for the financial Q2 of 2014 sometime in the beginning of July.

Samsung's CFO says the financial outcome for Q2 is not good, Galaxy S5 and mid-to-low range phones to blame?



source: The Wall Street Journal, Electronista via Pocket-lint

60 Comments
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posted on 26 Jun 2014, 05:53 12

1. clevername (Posts: 1436; Member since: 11 Jul 2008)


Uh oh. Is this the start of a trend?

posted on 26 Jun 2014, 06:48 7

14. itsdeepak4u2000 (Posts: 3718; Member since: 03 Nov 2012)


They need to change the design anyhow and somewhat prices too.

posted on 26 Jun 2014, 07:14 2

25. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)


I agree about design but what's wrong with prices?

posted on 26 Jun 2014, 07:54 9

40. marcski07 (Posts: 598; Member since: 25 Apr 2014)


prices of mid/low end phone are wrong, and somewhat not attractive too, they like mini-mes of S line, but retarded. there are local brand that are better and good looking and good speced, low/mid phones, like here in Philippines, Cherry Mobile, Myphone, Star Mobile, and some Chinese phones are taking over with their nice features. in my own perspective, samsung focused on competing iPhone, that they forgot the low/mid end phones... Sony and huawei is killing it in here, they have beautiful mid-ranged phones, and LG too, with their L series... and Myphone or what they call "Filipino Phone" one of the affordable android phone you can buy,. you can browse internet, watch YouTube, play games and watch even tv, or listen to radio.. for just $50 :)

posted on 26 Jun 2014, 08:36 1

52. itsdeepak4u2000 (Posts: 3718; Member since: 03 Nov 2012)


Now-a-days flagships are bit pricey. This could be one of the reason for blaming S5 sales otherwise nothing is wrong with S5 except design.

posted on 26 Jun 2014, 09:26 1

55. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)


"Now-a-days flagships are bit pricey."

Agree they are pricey but talking about Samsung's flagships they has +/- the same price as any other flagship (at least here in Europe).

posted on 26 Jun 2014, 08:16 4

45. WahyuWisnu (Posts: 1001; Member since: 29 May 2014)


I propose samsung to simplified the model line up and use German way of model number (mercedes benz and BMW).

Ex.
Galaxy S - highest spec
Galaxy E - medium spec
Galaxy C - Low spec
Galaxy A - Lowest spec

phone...
Galaxy S mini, Galaxy S, Galaxy S maxi (same spec, different screen size)
Galaxy E mini, Galaxy E, Galaxy E maxi (same spec, different screen size)
Galaxy C mini, Galaxy C, Galaxy C maxi (same spec, different screen size)
Galaxy A mini, Galaxy A, Galaxy A maxi (same spec, different screen size)

posted on 26 Jun 2014, 08:25 1

49. sar44 (Posts: 278; Member since: 14 Apr 2014)


noobs-haters got their way
samsung made isocell, improved amoled, on of best battery life and speed, wateproof. others did nothing, except that the speakers for kids, gimmick qhd, which only harm.

posted on 26 Jun 2014, 08:34 2

51. sar44 (Posts: 278; Member since: 14 Apr 2014)


On the contrary worsened, htc removed OIS, Sony made ​​the screen red and distorting oversaturated colors, and worsened the sound in the headphones, LG made ​​qhd and twisted sharpness because of what the image will halo.

posted on 26 Jun 2014, 11:53 1

66. engineer-1701d (Posts: 3271; Member since: 13 Mar 2014)


your the noob here we samsung fans wanted and they even said a new type of finish and look to the phone and it was crap all, just the worst ever, iso nice, amoled ok good battery ok speed +/- water resistant not proof, no wireless charge gimmick hr monitor, no front speakers big hurt because the s5 speakers loud but sucks. i wont leave my gs3 untill better look and spec my gs3 has 2 gb ram so does the 5 the note has 3gb ram

posted on 26 Jun 2014, 11:43 1

64. engineer-1701d (Posts: 3271; Member since: 13 Mar 2014)


its whats we all told them when they annouced this crap no one will buy it. a stupid heart rate monitor and no real tech updates and ugly as hell.

posted on 26 Jun 2014, 19:46 1

82. corporateJP (Posts: 2431; Member since: 28 Nov 2009)


This is what happens when you flood the market with garbage, you lose that brand luster.

Try a Galaxy Ace or Centurion, let me know how that works out for you...

posted on 27 Jun 2014, 07:28 1

86. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


their ugly design is killing them... beastly spec'd enclosed in unattrative shell... there are many customers who never bother to understand the specs, they just look at the design and become fan. For example, why such a low spec'd apple is so popular? bcoz apple know most products are sold on its percieved value not on real value... so apple always try to bring something which appeal to our eyes, bcoz we can see better than what we can read... once we become fan then we create self justification by ourself to justify our choice... this is what keeping apple's customers and business intact... seeing is believing...
beside that mid range and low range of samsung are not decently spec'd like chinese competitors... I have seen the price of samsung's mid end and low end are so high that you can find something else decently spec'd in same price

posted on 26 Jun 2014, 05:57 7

2. express77 (unregistered)


Their flagships are great but their mid/low rangers are crap nowadays. And also the design.

posted on 26 Jun 2014, 06:09 14

9. hipnotika (Posts: 353; Member since: 06 Mar 2013)


galaxy s5's design is more ugly than mid/low devices

posted on 26 Jun 2014, 07:35 14

34. marcski07 (Posts: 598; Member since: 25 Apr 2014)


you're wrong because they are all the same!!!! same! same! same! that's why they find samsung boring!

posted on 26 Jun 2014, 06:11 12

10. ryq24 (Posts: 695; Member since: 17 Oct 2011)


Totally agree. Lg sony and htc have better specs in their mid range phone than samsung.

posted on 26 Jun 2014, 07:53 1

39. express77 (unregistered)


*ranges*

posted on 26 Jun 2014, 05:59 5

3. timukh (Posts: 292; Member since: 04 Feb 2013)


In my country at the time of launch s5 was priced at $833. Now it is selling at $600...!! The price cut was due to low sales. But samsung officials said it wasnt true. Well now i guess that it was actually true..

posted on 26 Jun 2014, 06:01 2

4. nokia12 (Posts: 465; Member since: 19 Nov 2013)


let me guess you are from india ? :D

posted on 26 Jun 2014, 07:49 3

37. DocOc (Posts: 138; Member since: 23 Apr 2014)


Why would anyone pay $833 for a freakin phone??? I can get a 60 in flat screen TV for $600!!

posted on 26 Jun 2014, 08:18 1

47. marcski07 (Posts: 598; Member since: 25 Apr 2014)


WOW, 60 INCH FLAT SCREEN? FOR $600, what country where you from?in my country 60inch flat screen tv costs $1000+

posted on 26 Jun 2014, 11:56

68. engineer-1701d (Posts: 3271; Member since: 13 Mar 2014)


my 55 inch tv cost $2400

posted on 26 Jun 2014, 11:55

67. engineer-1701d (Posts: 3271; Member since: 13 Mar 2014)


a bad tv for that walmart tvs,

posted on 26 Jun 2014, 06:01 7

5. chocowii (Posts: 435; Member since: 30 Jan 2014)


Youre on the top, only one place to go is to go down.

posted on 26 Jun 2014, 06:01 6

6. darkkjedii (Posts: 20029; Member since: 05 Feb 2011)


Simply put, just as with apple and the iPhone, it's time for Samsung to revamp the galaxy. Absolute great device line, but the looks are bland, although pretty, and the features are nice but not a huge leap. Not much of a jump, between s4 to s5. Apple and Samsung are in very good shape, but we all know, both could blow the kid off, if the really wanted too.

posted on 26 Jun 2014, 06:51 6

16. StraightEdgeNexus (Posts: 3689; Member since: 14 Feb 2014)


Agreed. They make S devices to compete with iPhones, so they must make their designs attractive. Also the touchwiz ugliness and bloat vs. iOS elegance and smooth performance should be solved. +1

posted on 26 Jun 2014, 07:08

21. darkkjedii (Posts: 20029; Member since: 05 Feb 2011)


I think the s6, and note 5 will change quite a bit. +1 back atcha

posted on 26 Jun 2014, 11:58

69. engineer-1701d (Posts: 3271; Member since: 13 Mar 2014)


its called android stock hahahaha i like my touchwiz but i like tizen look better make touchwiz look like tizen/android L

posted on 26 Jun 2014, 07:09 1

22. darkkjedii (Posts: 20029; Member since: 05 Feb 2011)


Oops lid, and to.

posted on 26 Jun 2014, 06:03 1

7. sun0066 (Posts: 117; Member since: 12 Feb 2011)


selling a phone with 16 gb on board in 2014 , I mean a flagship , is inacceptable , but they do it for you have to upgrade it eventually , marketing strategies that are working in oposite way as intended

posted on 26 Jun 2014, 06:28 8

12. joey_sfb (Posts: 5411; Member since: 29 Mar 2012)


Hope they learned their lesson. 16G plus bloatware no deal for me.

posted on 26 Jun 2014, 07:10 1

23. darkkjedii (Posts: 20029; Member since: 05 Feb 2011)


+10 on that post.

posted on 26 Jun 2014, 17:00

80. pego99 (Posts: 86; Member since: 01 Aug 2012)


That is so true. I refused to buy a 16Gig unit I would have bought a 32Gig

posted on 26 Jun 2014, 06:07 3

8. uchihakurtz (Posts: 358; Member since: 12 Nov 2012)


I hope this will motivate Samsung to up their game next year. I really want to like the S5, it's actually near perfect but that design language, so awful.

posted on 26 Jun 2014, 06:14 1

11. mayur007 (Posts: 563; Member since: 10 Apr 2012)


Yes that will be buying same phone year and year again and again.

Same look phone again and again... with hardly upgrade.. things

posted on 26 Jun 2014, 06:49

15. StraightEdgeNexus (Posts: 3689; Member since: 14 Feb 2014)


.....

posted on 26 Jun 2014, 06:52 7

17. Napalm_3nema (Posts: 2155; Member since: 14 Jun 2013)


I don't think this is news to anyone but the diehard Samsung fanboys. Samsung thinks gimmicks sell, instead of actually investing in quality.

posted on 26 Jun 2014, 07:12 1

24. wilsong17 (unregistered)


Oh look the fan boy talking why you thing they are number 1 in Android

posted on 26 Jun 2014, 07:32 2

33. Napalm_3nema (Posts: 2155; Member since: 14 Jun 2013)


And? You guys don't get to have it both ways. If Samsung flagships are great because they are the best selling Android smartphones, then how is the iPhone "bad" when it is the best selling smartphone in any ecosystem?

I believe good is good, regardless of sales, but when your quality is questioned by reviewers and your sales fall off, it is tough to make the argument that a phone is good.

posted on 26 Jun 2014, 07:02

19. ChandlerBing (Posts: 35; Member since: 17 Feb 2014)


Is this the beginning of the end for Samsung? Will LG finally overtake them?

posted on 26 Jun 2014, 07:07 7

20. Martin_Cooper (Posts: 1373; Member since: 30 Jul 2013)


This is what happens when you are on top for years without innovating and letting competition catchup and even surprise you in terms of value for money and innovation. Look at Nokia, Blackberry, Apples iphones, and now Samsung. Seems no one learns from history.

posted on 26 Jun 2014, 07:14 1

26. livyatan (Posts: 867; Member since: 19 Jun 2013)


This is good for the market..both Samsung and Apple(the real truth is Apple's last quarter report would've been very grim if they haven't re-released the iPhone 4 in some markets.. It reportedly sold in up to 10 million units actually) are slowing down.. It gives chance to other brands

posted on 26 Jun 2014, 07:51

38. Napalm_3nema (Posts: 2155; Member since: 14 Jun 2013)


It is, but the iPhone is actually picking up in sales, not slowing down. The last two quarters were better, YoY, and the 5S comprised roughly 75% of sales. Q2 only saw a drop of $4 in average selling price, which means 5C sales picked up a bit and the 4S held steady at approximately 20% of sales.

posted on 26 Jun 2014, 07:14

27. tiara6918 (Posts: 2026; Member since: 26 Apr 2012)


Come on, it's not because of the design. It's because you can get better low to midrange handsets from another manufacturer

posted on 26 Jun 2014, 07:17 2

28. tiara6918 (Posts: 2026; Member since: 26 Apr 2012)


Thanks Samsung fan for saying plastic is better, now I can't wait to get cheaper plastic from XiaoMi Huawei and Lenovo instead of overpriced Samsung

posted on 26 Jun 2014, 07:21

30. 14545 (Posts: 1463; Member since: 22 Nov 2011)


Maybe they should listen and stop increasing screen size at such an alarming rate. Some of us want the newest flagship......BUT NOT.... in a "phablet". Not that it even means anything now. I have seen my thoughts on many places about this recently.

posted on 28 Jun 2014, 08:15

87. g2a5b0e (Posts: 3722; Member since: 08 Jun 2012)


Your comment makes so little sense. Every OEMs phones are getting bigger every year. In fact, Sony & LG's flagship & phablet are larger than Samsung's.

posted on 26 Jun 2014, 07:30

32. NationGuettaTR (Posts: 38; Member since: 28 Dec 2013)


Because no one loves plastic anymore+your software is total c**p. Will switch a Nexus device or LG G3 due to metallic case and good specs. Still have regrets to bought Note 3. I wish i was wait for G3.

posted on 26 Jun 2014, 07:54

41. DocOc (Posts: 138; Member since: 23 Apr 2014)


I think the biggest problem with the S5 and other flagships is that they are not matching the phones capabilities with the capacity very well. There is no way that a flagship phone that you are paying $650 for should lag in any way. The S5, G3, and Z2 all have some lag. This is unacceptable. Slow down a bit on the million functions and put hardware in the phones that can make it all run smooth. The M8 has probably been the smoothest so far. I think the phones that come out this Fall will get all that straightened out with the 805 chip and 3 GB. Competition is good though, ain't it?!

posted on 26 Jun 2014, 08:08

43. ManusImperceptus (Posts: 724; Member since: 10 Jun 2014)


Problem is they're running Android, which will never REALLY run smoothly...

posted on 26 Jun 2014, 08:19

48. xfire99 (Posts: 798; Member since: 14 Mar 2012)


Samsung doesnt only sells smart phones. -.-

posted on 26 Jun 2014, 08:25

50. Beijendorf (Posts: 340; Member since: 27 Aug 2013)


To say what some people here always say when HTC report operating losses;

Oh this is the end of Samsung, they'll be bankrupt by the end of the year and blah blah blah financially uninformed nonsense blah blah.

posted on 26 Jun 2014, 08:42

53. brasstax (Posts: 281; Member since: 16 Apr 2014)


I don't think it's a secret that mid to low end devices are Samsung's bread & butter. And that's where they are facing major competition in developing countries like India, China & Phillipines. Samsung's strategy thus far has been to flood the markets with multiple models. Not a bad strategy. But where they slip up is in the pricing.

Low end Samsung phones simply do not offer bang for buck value that local OEMs do. Put simply, they are priced way too high & have much poorer specs than the local competition.

IMHO there is nothing wrong with Samsung in the flagship segment. They need to really look at what they have to offer in the mid & low end segment. It wouldn't be a bad idea for them to use mediatek chips for these segments. As someone who has been using mediatek chipset based phones for the past 2 years, I can vouch that they are not all that bad as they are made out to be.

Sure they don't support LTD & their GPS performance is poor. But Samsung needs to be smart & play the market. Let is not yet a big deal in India & it's a huge market. Samsung is a trusted brand here but has recently lost out to local OEMs who offer comparatively better specced phones at very competitive prices.

posted on 26 Jun 2014, 08:47

54. brasstax (Posts: 281; Member since: 16 Apr 2014)


Oops I meant LTE is not supported by mediatek & again LTE is not yet a big deal in India

posted on 26 Jun 2014, 09:56 1

56. alumoyo (Posts: 348; Member since: 26 Aug 2013)


So lets gratuitously throw in the FULL GALAXY S5 gallery to help with the situation!

posted on 26 Jun 2014, 10:30

60. Awalker (Posts: 1430; Member since: 15 Aug 2013)


I was reading somewhere that Samsung released the S5 in twice as many countries as the S4 and they sold 10 million units only a couple of days earlier than its predecessor. I don't think the S5 is selling as planned.

posted on 26 Jun 2014, 13:47

78. mrblah (Posts: 576; Member since: 22 Jan 2013)


Lets face it, the S5 is a huge flop. Yea, yea, it sold good for the first few months, but I expect to see it on amazon for .01 soon.

posted on 26 Jun 2014, 15:56

79. kkmkk (Posts: 471; Member since: 06 May 2013)


don't understand me wrong but i hate Samsung !!
i think they should not be the company that lead the world im sure in two years LG will be the leader and apple will be the second and Samsung will be the next Nokia

posted on 26 Jun 2014, 17:13

81. Loubielou (Posts: 504; Member since: 11 Jul 2012)


Samsung as themselves to Blame,by Bringing to much versions of the Models they Produce,o.k the Galaxy S5 Preforms Superb,but then we get Better Versions Released a Month After,so Consumers are not Jumping in Straight Away of the First Version they Release,We then get Told of The Galaxy Prime,so this will make alot of Galaxy S5 owners Very Unhappy

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