The launch of Samsung's Galaxy S5 was expected to be the world's biggest smartphone maker’s knight in shining armour and help propel them to heady heights of market share, revenue and ultimately the holy grail of profit. Well, when Samsung's latest quarterly results hit the streets, the knight in shining armour appeared to be more of an guy in a shiny ‘80s shell-suit riding a rusty old bike.
A couple weeks back I talked about some dour forecasts from Samsung and now the results are out and confirmed, it appears they are doing as badly as they had forecast. Sales of the S5 have been particularly disappointing and from the money point of view this is really worrying because Samsung’s smartphone business has historically been a major contributor to their revenue pot. The quarterly profits came in at $6.1 billion which is still a fair chunk of money but it is the lowest quarterly profit in two years and Samsung is already forecasting the same sort of results for the next quarter.
They do have some potential light at the end of the tunnel with the launch of the Note 4 but although they are expecting to see some kind of sales spike around that, Samsung is not expecting the same level of success they have seen in the past.
Much of Samsung's dilemma goes back to their never-ending battle with Apple. The iPhone is moving off the shelves as fast as it can be stocked and with the much rumoured bigger iPhone 6 on the horizon coupled with the budget-end of the Android market being commanded by the likes of Huawei, etc., Samsung's management and investors should certainly be worried.