Samsung misses second quarter profit forecast as Galaxy S4 sales flatter to deceive
Samsung has missed its second quarter profit forecast according to Reuters. Reportedly, the forecast was already a modest one, but still the company missed the target owing to disappointing sales of the Galaxy S4, which is its flagship smartphone. A couple of days ago we reported that Samsung had shipped 20 million Galaxy S4 units till date. While operating profit rose to $8.3 billion, this was slightly short of what analysts at Bloomberg had predicted.
Clearly, it has been proven that Samsung is being pushed to the hilt with the Galaxy S4 as rivals like HTC have managed to offer more compelling options to consumers than the Galaxy S4. Apart from the plastic build of the Galaxy S4, the phone is riddled with confusing software features that may not attract the average consumer.
According to the Reuters report, investors are worried if Samsung’s smartphone business has peaked and is now slowing down just like Apple’s, as the growth has surely slowed down. As a result of the disappoint results, the share price has also fallen by 3 percent.
Yet, people like, Jung Sang-jin, a fund manager at Dongbu Asset Management claim that Samsung still has exciting stuff in store, though even he is not too sure if the consumers will be wowed by the products.
It is also being noted that margins in the smartphone business are dwindling and Chinese OEMs are making things even more difficult. Even in a market like India, local vendors like Micromax have made things difficult for Samsung in the sub-Rs 15,000 price bracket.
Even the Galaxy brand is sort of facing a fatigue of sorts, as Samsung uses it to market its entire Android smartphone line up. Adding to the woes, Samsung has created a level of confusion for its flagship product by launching three more devices with the Galaxy S4 moniker – the Galaxy S4 Active, the Galaxy S4 mini and the Galaxy S4 zoom.
In September, Samsung is expected to launch the Galaxy Note III along with perhaps a Smart watch and this will be the real litmus test for Samsung’s dominance.
