Samsung has just revealed a huge drop in earnings for the last quarter, but the company was quick to point to an expected sharp recovery driven by the well-received Galaxy S6 smartphones that recently emerged (the vanilla S6 and the Edge variant).
Bloomberg reports that Samsung’s earnings for the quarter running up to the end of March dropped by no less than 40 per cent, with the firm’s smartphones (the Galaxy S5 was the flagship in this quarter, of course) being battered because folks have turned to the popular iPhone 6, and also cheaper Chinese devices from the likes of Huawei and Xiaomi.
Samsung’s net income for Q1 dropped to 4.52 trillion won (£2.7 billion), and operating profit at the mobile division was slashed to 2.74 trillion won (£1.65 billion), less than half of what it was the previous year.
However, Samsung said all was well, and earnings will recover in the next quarter due to the Galaxy S6, which has seen much praise from critics, and very strong pre-orders – the device set new pre-order records in its home turf of Korea, and over in the US, T-Mobile said that S6 pre-orders were close to double that seen with the Galaxy S5.
Samsung also noted that continued growth would be driven by sales to expanding smartphone user bases in emerging nations like China.
Greg Roh of HMC Investment Securities told Bloomberg: “The second quarter will be brighter as mobile earnings are expected to improve, largely driven by the increased sales of the S6. The pricier Edge device will take up half of the total S6 shipment from May and that will give a strong lift to its mobile business.”
A Samsung executive recently went on record as predicting that the Galaxy S6 handsets will top 70 million in sales, which would truly be a return to form for the series (the Galaxy S5 was the first phone to go backwards in the range, selling less than the S4 managed – indeed by the close of 2014, the S5 was down 40 per cent on its predecessor).
Apple has also just unveiled its latest results, with another fresh record quarter, hitting quarterly revenue of $58 billion (£38 billion) and a net profit of $13.6 billion (£8.9 billion), with the new iPhones doing storming business. The Galaxy S6 is likely to take some wind out of Apple’s sales though, by the looks of things…