Samsung struggles to stay afloat as Apple iPhone 6 looms

Samsung is scrabbling to hold on to its share of the smartphone market amidst fierce competition from cheaper Chinese rivals and high-end Apple handsets.

A colossal survey by research firm Counterpoint questioned 35 markets that account for nearly 90 per cent of global smartphone sales. It found that the Galaxy S5 appeared to be doing worse than the Galaxy S4 had done in its early launch against the iPhone 5, with each selling about 7 million units a month.

Interestingly, the survey collected its data from retailers' sales to consumers, as opposed to typical industry data that look at shipments made by the manufacturer.

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An analyst for Counterpoint, Tom Kang, who is based in Seoul said that the Galaxy S5 suffered because it fell short of wider market expectations. Smartphone enthusiasts now expect more in terms of display quality, and the popularity of metal-backed handsets like the HTC One M8 and LG G3 threaten Samsung's reliance on plastic.

"They made one mistake, one product that didn't hold up to expectations and they are paying the price," Kang told Reuters. "They will have to move forward and leave behind what has failed and focus on the next product."

Last week Samsung published its second-quarter earnings guidance, which was weaker than expected and revealed the Korean company is on track for its worst quarterly profit in two years. Samsung claimed this was due not to handset rivalry, but to price competition and higher inventory levels in China.

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However, Counterpoint's data suggests that the problems are more corrosive than just low to mid-tier inventory build-up. Analysts have suggested that the Galaxy S5 did not offer enough to entice consumers away from rival handsets that offered impressive specs in cheaper packages.

Worryingly, the launch of the iPhone 6 also looms and threatens to put another squeeze on one of Samsung's key market advantages. The new generation of flagship Apple devices are rumoured to boast bigger, phablet-sized screens which until now has been seen as one of Samsung's expert areas.

Apple will also likely continue to take advantage of its loyal fanbase and charge a premium, stealing away high-end customers from its Korean rival.

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