Galaxy S6 Edge demand is to blame for Samsung’s poor Q2

by: Robert TriggsJuly 7, 2015

samsung galaxy s6 edge unboxing aa (17 of 20)

Earlier in the day we reported on another lacklustre quarter for Samsung’s mobile division, as the company prepares to report its seventh consecutive quarter of declining profits. It turns out that the Galaxy S6 Edge might be to blame for much of Samsung’s weaker than expected earnings.

According to the preliminary report, Samsung is expecting 48.0 trillion Korean won in consolidated sales and an operating profit of 6.9 trillion Korean won, which translate to a 4% decline over Q2 of 2014. As Samsung’s semiconductor and TV business are expected to grow, the blame is being laid squarely at the mobile division. More specifically, sales of the company’s latest flagship smartphones – the S6 and S6 Edge.

Samsung lack of production capacity for the Galaxy S6 Edge’s display have been well documented and the company has been attempting to address the issue for months. However, the problem is not so much that Samsung isn’t able to keep up with Galaxy S6 Edge demand, but rather that the Galaxy S6 Edge has had a direct impact on sales of the regular Galaxy S6.

samsung galaxy s6 vs s6 edge aa (12 of 39)

Samsung was not expecting similar demand for both Galaxy S6 versions

According to sources familiar with the matter who spoke to The Wall Street Journal, Samsung misjudged the type of smartphones that consumers would be after. The company expected to sell four Galaxy S6 handsets for every S6 Edge variant and setup production accordingly. However, demand has ended up being much closer to a 50/50 split between the two.

As a result, Samsung has been left with Galaxy S6 stock that simply isn’t selling. Apparently the white variant is particularly overstocked. Even if the company could produce more Edge units, it would still have incorrectly invested large sums of money into excessive production of the regular Galaxy S6.

samsung galaxy s6 review aa (3 of 45)

Samsung has been left holding lots of Galaxy S6 stock, as customers wait for more S6 Edge production.

Since launch, Samsung is said to have reconfigured its manufacturing operations to help produce as many Galaxy S6 Edge units as are needed. Samsung has previously stated that it would be able to meet demand more accurately by the end of June, which would have just missed out on the Q2 figures.

Sales and profit figures could rebound in the third and fourth quarters, providing that the Galaxy S6’s popularity holds up. Even so, this is likely to be a costly miscalculation for Samsung, which was hoping to improve its profitability this year after the sharp declines of 2014.

  • Afraz Mathias

    Verrrrrrrrrrrrrrrry Nice mobile Samsung team. I hope you do hard work and show good result. God bless you

  • Thing is, Samsung isn’t a one-hit-wonder like Apple. If Apple has bad phones sales, Apple could go under. Samsung makes and sells…. Everything. They are so huge that when one division (this story is about ONE division) it means that another is doing very well. It’s like pulling on a fitted sheet and another corner popping up. So they’ll make a fortune off of all the parts they sell to Apple rather than off phone sales, while having the best phone in the world, and being able to position themselves to leverage that best phone in the world the next few quarters, before releasing another phone following their new class leading formula.

    But it’s fun to pretend they are in trouble I guess.

    • Pez Nospam

      Samsung has a military division. Apple/Stevie wanted to go nuclear with Android. :-)

    • velu

      Mobile and semi conductor brings 95% of their profits.

      If mobile division goes down , so are their 40% profits.
      And it also affects the semi conductor division because mobile division is their major customer.

      • Um, that’s again just one tiny part of a huge Chaebol. They make military equipment, satellites, buildings, some of the largest ships in the world, etc. You need to education yourself some.

        • velu

          Before cheer leading try to get your facts right ( you can easily find it in google ).

          Samsungs other affilate companies makes money which is not enough for buying peanuts when compared to electronics diviison.

          Check previous quarter results of some of its sister comapnies and compare it with its electronics division,

          Operating profit of Cheil Industries Inc., Samsung’s clothing arm and virtual holding company, had been forecast at 42.6 billion won in the first three months of this year, but the firm posted 6 billion won.

          Samsung Heavy Industries Co., a shipbuilding unit, posted an earnings 74.7 percent below the earnings estimate at 26.3 billion due to prolonged slump in the global shipbuilding industry.

          Samsung SDI Co., a chemical and battery subsidiary, saw its operating profit tumble 81.6 percent on-quarter to 6.8 billion won due to weak battery sales, 77 percent lower than the earnings estimate.

          In contrast, Samsung Electronics Co., the world’s largest phone maker and the group’s flagship unit, managed to announce earnings that beat the market expectation. Its operating profit was 5.98 trillion won, higher than the market median of 5.9 trillion won.

          • Your own numbers are destroying your own case and making my original point for me.

          • velu

            I am sure you either have reading comprehension or illiterate .
            Learn to differentiate between millions , billions and trillions ;-)

          • It isn’t even fun owning you. You are really young aren’t you? I made my point quite clearly. I’m sorry reality disagrees with your active fantasy life.

          • velu

            lol.. Probably it looks like you owned yourself.

          • Yeah. Ok then.

  • Marty

    Hard to believe that many people opted for the gimmicky Edge. I bet many of them have regretted it. I’m glad I got my regular S6 before Samdung quits making them.

    • it’s me tim-cock.


      • Marty

        Ewww…thanks for bringing that error to my attention. Slamdung.

        • it’s me tim-cock.

          I wonder why are you so hurt? Tired of being used and abused? Lmao

    • Stadi

      I don’t understand why people like the Edge version. I would never buy a phone with a screen like that

      • Martin Lane

        Not that surprising, aesthetics over function seems to be the preferred choice for many.

        People are shallow.

    • WTF

      You’re an idiot. The edge is a design so explain to us HTF that’s a gimmick?

      • Martin Lane

        Try that again and this try making sense because that made none.

      • Marty

        WTF, WTF?

    • Martin Lane

      I betting many of them regret it.

    • velu

      Edge makes no sense unless one rests their phone upside down.

  • ThatDudeKee

    Samsung should have never removed the microsd card. People who couldn’t afford the s6 edge went other routes instead of the s6 because it lacked this. I have 2 S5s and 1 S4 on my account. I want a new phone badly, so I’m waiting for the note. If those don’t have some sort of expandable memory, samsung is gonna face another quarter with declining sales.

    • Sherpa

      You might as well start looking at other phones. I don’t think Samsung will include an expandable memory slot with Note 5. Everyone is going the route of Apple.

      • Leonard Gallion

        Well not everyone, for example LG and popular mid range offerings (Alcatel Idol 3 & ASUS Zenfone 2) feature SD card slots also. People are divided among wanting ‘practical’ vs ‘fashionable’ so it doesn’t surprise me that the fashionable crowd went with the edge (something with a really different look) while it left the practical crowd hanging and looking for alternatives. Between LG & those mid range phones (which are getting better & better at 1/2 or 1/3 the cost), Samsung may well find their lost this segment of the market to gain another one and so net out at little or no gain.

        • Sherpa

          We will see what happens with LG G5. Also, people who are interested in phones from LG, Samsung, HTC, etc. don’t usually go for mid-range phones.

          • Leonard Gallion

            I think you are right that companies would like to do away with it so they could upsell you higher memory models. Also most people aren’t aware of mid range phone even as an option, however I think that will change over time. Long term I think the Android market place is being consumed by lower cost China/Taiwan models on the low end and a struggle for differentiation at the high end, so this may fight against the anti SD card trend (or push to including large amounts of storage by default). It will be interesting to see how the Android market plays out, should be interesting.

  • Martin Lane

    They’ve earned more profit than they did in Q1 this year so why the negative spin?

    • Pez Nospam

      Capital pigs want more blood from stones. :P

    • neo905

      It’s not spin. It’s about year over year comparisons. That removes seasonalities. You compare it to the same time last year.

      • Martin Lane

        Well that’s interesting I don’t think that counts for much given the state of the market.

        • neo905

          It counts for everything as far as the well being of a company both internally and to investors. You constantly grow or you die. That’s how capitalism works. It isn’t sustainable though. Hence why we have recessions. Or we at least did before Central Banks around the world started messing with the financial system…but that’s another story, so I digress.

          • Martin Lane

            Important internally and to investors? sure.

            I’m neither though. :)

          • neo905

            Internally within the company because they have to reevaluate the decisions they made( ie. Not waterproof, no SD card, no removable battery)for the S6 for future devices. That where it impacts we the consumer because collectively we didn’t like this device as much as the S5 or S4 for that matter. People speak with their wallets the same way investors do.

    • TheNuts

      The ‘negative spin’: Samsung made a great product in the S6 Edge; Samsung released the Edge along side it’s halo; Samsung didn’t expect the demand and is left holding the bag of unsold regular S6’s. They goofed.

      • velu

        Most probably samsung is spinning the disk.
        Not able to meet the s6 edge demand is not easy to beleive.

  • StaceyFFontenot

    Some New Features with androidauthority….. Go To Next Page

  • Daggett Beaver

    The edge is in bigger demand than they expected… that’s not such a bad problem to have.

  • Pieter Uys


  • Anothermuse

    There is nothing shocking that with the industrialized world having reached saturation in smartphones that Samsung will keep struggling with year over year comps. In the S3 and S4 days Samsung had the Android mass market cornered. Now you have solid offerings from LG, HTC and Moto so added to the fact that everyone now has a pretty good smartphone this is not a surprise. There doesn’t seem to be anything right now that will be a proprietary MUST HAVE feature that will send people flocking to Samsung or any other Android handset right now.

    Apple has it easier because they can carefully control and manipulate their product line to milk the smartphone wave as long as possible. The 2 year delay in a larger handset combined with a slow introduction to China allowed them to control pace. This years 6S will be interesting though especially as US carriers are phasing out subsidies so people will see what they are paying for. Also the biggest wave of Apple folks looking for modern sized screen should have already hit. They pent up demand for that for 2 years. This will be an interesting year for Apple phone comp sales since I can’t think of another stunt to outdo the i6 releases. But Apple has been incredibly smart in handling this so far, so I expect there will be some way for them to hit their numbers. Probably by using a heavily discounted i5 in emerging markets, then only reporting total phone sales, not broken out by model.

    • abazigal

      It’s worth noting that way more people bought the 5s compared to the iPhone 5.

      If you think the number of people upgrading to the iPhone 6 and 6+ was phenomenal, wait till you see the number of people raring and ready to upgrade to the 6s. This is just the beginning. The beginning of Apple’s ascent. All the way to the top.

  • Tricky

    To high of a demand is bad now too! Samsung can’t win can they hahaha. I hope that everyone reading this article can realize that Samsung could have 20 straight quarters of profit loss and not even come close to running out of money… Like a bucket of water of waste in vast sea of money… Lol

    These figure mean nothing to anyone, investments are a different division then sales profit. These articles matter though because they influence who ever read them, causing people to not invest. A company can operate at “break even” for ever. Profit loss means nothing to us as a consumer, it could mean they spent some money on RnD for tizen…

    Just realize that if they are making a profit, and are in the black they are fine, totally fine. If they can’t pay their bills, and are in the red, then we should worry because the company could ligit go under. Samsung is one of those companies that are to big to fail… All they need to do is prioritize better and they will be fine, its clearly not demand for their products that is the problem.

    • abazigal

      It’s stil poetic justice nonetheless. Weren’t people just prophesying that Apple would meet their doom at the hands of Samsung? This is the “next big thing” that was supposed to knock Apple off its perch? As an Apple user, I suppose I should feel insulted.

      • Chris H

        You won’t know what the real next big thing is until it is too late.

    • Aki I.

      I hope people aren’t making investment decisions based on android authority articles.

      • PokPok

        since when is buying a phone an investment?????the minute you buy it it drops in value!

        • C. Ruppel

          I took their comments as having to do with investing in Samsung stock, not “investing” in purchasing a phone.

      • Tricky

        I hope too, but dont have faith that people wouldn’t. Watch Enron smartest guys in the room, and you will be in for a surprise( not a direct comparison to android authority and business investments, just how much media can influence peoples decisions)… This article has shown up on every site from business insider to android authority, its bound to make some worried investor pull out.

  • TheManWithABigToe

    Samsung blows it again.

  • John Connor(Aggie4lyfe)

    iPhone 6 plus couldn’t be found for months and still Ape broke sales records. This is nothing but excuses. Apple wins!! Make the switch folks!

    • blim ey

      so because there are lots of users of Apple, means for you that jump the bandwagon and join them…. so if there are tons of morons out there, you are going to jump that bandwagon and join them as welll….. coz nowadays, its not using your brain, but who/what is popular… just a thought… have a nice day =)

    • Some of us are power users. Apple doesn’t make a phone for power users.

      • velu

        What kind of power use samsung devices are capable which iPhones cant ?

        • Some users want rugged phones that don’t bend. Samsung has those. Some want best in class camera performance. Samsung’s cameras are better. Some folks want a dedicated stylus. Samsung does it best. I mean, I could going on, but the reality is that the iPhone is a toy. If you want to play games, get a toy. Great for games. Nothing wrong with that. But some of us need a real smartphone.

          • velu

            lol.. ok
            can you give one or two example of power use or keep running in circles ?

          • Um. Look, not all of us are so pathetic that we try to pretend a toy is a smartphone. Hell, own both because I like toys too. You don’t need to pretend your toy is “the best phone” when it clearly isn’t.

          • velu

            So you claim you are a power user , but running in circles when asked to give one power use of samsug phones ;-)

          • I listed four. Are you daft or blind?

          • velu

            Can you list it again in simple words or you are happy running in circles ? ;-)
            Or you feel that you are aught pants down Mr.Power User

          • You can just look up this chain a few and read. You get how stupid you look right? Like people are laughing at you at this point.

          • velu

            Probably you are living in alternate universe with twisted realities , Mr.Power user.
            Not sure people laugh at my posts or not , but i am sure your stupidity got no bounds.
            Anyway how long you keep running in circles?

  • Jonathan Kramer

    If they’re smart, they’ll do what Moto has done and reduce the price significantly.. lots of competition out there so it’s buyer’s choice. Bang for the buck always wins out with a flooded market

  • nikolas ostropolskiy

    I’m sure the demand would be just fine had samsung not just given away hundreds of them on movie sets and at the BET music awards…. rather than appealing to paying customers, they just give them away to celebrities that have the money to fabricate a 4 edge screen.

    • They were taking a page from Apple’s playbook. Apple gives away free phones and laptops to even c-grade actors.

      • velu

        But samsung is the only one giving free tables to whoever buys from them to help clearing the inventory. ;-)

        • Actually, no. Apple gives away macbooks. Google it. If you have a movie set, Apple literally shows up with a truck and starts unloading piles of products and says “here, use these in your movie and keep them”.

          • velu

            But your point doesnt deny the fact that samsung is good in giving free tablets as a means to clearing the inventory.
            Have you seen the samsung Q2 unaudited results and how the POWERful s6 and s6 edge sold?

          • I know they can’t keep the Edge in stock. I don’t know about their tablets. I actually hate Samsung as a company. They stiffle innovation and push around better vendors.

          • velu

            How do you know , are you on samsung payroll ?.
            Edge was available on day one everywhere ( except one color just to create an illusion of demand ).
            Either you are innocent or stupid enough to buy samsung story.

            Well samsung stifle other companies by fast copying. Innovation and samsung .. lols

          • I know in Washington DC, when I tried to hustle a Samsung Edge out of work to get one for review, I could not. The stated reason was because all three vendors we buy from were sold out, and there was no time estimate on when they would be back in stock.

          • velu

            Too difficult to believe that edge was sold out initially . As far as i know it was available in every kioshks.
            Its just a face saving ploy by samsung to cover up their poor S6 sales.
            Poor revenues and profits when compared to S5 which was considered as flop gives some ideas about S6 sales/shipment.

            Apple atleast enhance the feature that they are bringing in again.
            Take fingerprint , motoroloas implementation was clumsy and difficult to use , apple made it simple and also they waited till the tech was reliable.
            Well less said about samsung is better.

          • Should be very easy to believe. It’s the hottest phone in the world. Trust me, they had PLENTY of regular S6’s. I know they keep offering me them. “Just checking in to see if a regular S6 will suffice! Thanks!” and I’m like, no I went with an iPhone 6 ages ago.

          • velu

            Probably S6 is the hottest mobile , but market for android premium segment is saturated and crowded.
            Q2 result proves that S6 & S6 edge is not a hit.

          • Yup. It’s just a shame you can’t buy a decent iOS phone. Wouldn’t it be awesome if a better maker like Xiaomi or Motorola could make an iOS device?

          • velu

            iOS phones will be even more awesome if the software and OS is developed by Samsung ;-)

          • velu

            Hi .. I am sure the samsung’s q2 results and the massive price cuts on edge and normal s6 proved that both were flops
            If edge is selling well and is still in demand , samsung won’t be reducing the prices

          • No, that’s not what the numbers showed at all. That’s just how the apple biased valley press spun it. Then idiots believed it.

  • PokPok

    gimme a s6 non edge any day thanks!

  • Samsung has dropped price of Galaxy S6 / S6 Edge in india drastically. Almost a drop of 130 $ – 180 $ on Galaxy S6 and S6 edge 32 / 64 GB variant. Lets take the case of Galaxy S6 32 GB ( Launch price in India INR 49,900 ~ 785 $ , New Price – INR 38650~ 608 $ )

    Been a bad year for Samsung guys. Tough luck. Actually the mistake happened from start when operators pre ordered 20 mn handsets ( 15 mn S6 + 5 mn S6 Edge ).

  • Ayube Ibne Nur
  • stfu

    Lol of course people would want the edge over the regular s6. How could samsung not see that?

    • velu

      Edge was available in all the stores. Its a coverup.

  • Clark

    I’d rather spend an extra $100 to get an S6 with 64 GB than to get a curve screen that doesn’t do anything useful to me except show the time from a different angle. People who are buying the Edge are making a bad choice if they are picking it just because it’s considered to be “new”.

  • randomdog

    I took one white S6 off their hands. Just doing my part to keep Samsung from going under. ? fantastic phone, BTW…