Samsung has sold 40% fewer Galaxy S5 units than it had anticipated – WSJ

by: Matthew BensonNovember 24, 2014

samsung galaxy s5 aa (5 of 36) 

It’s interesting how things can change over a short span of time. Just a few years ago, the tech world was caught up in the legal turmoil between Samsung and Apple, but now mention of the Korean giant is all about sluggish sales, cutting product lines, and even a possible management upheaval.

Thanks to a recent report by The Wall Street Journal, another layer of the lethargy has been exposed: Samsung has sold 40% less Galaxy S5 handsets than it had anticipated. According to people familiar with the matter cited by WSJ:

  • Samsung made 20% more S5 units than S4, following demand predictions made by carriers.
  • Roughly 12 million S5 units were sold in the three months following release, compared with 16 million for the S4.
  • In all, Samsung sold 40% fewer Galaxy S5 units than it had anticipated.
  • One market where Samsung sold more S5 units than S4’s is the US.
  • Samsung’s second largest market, China, saw a 50% decrease of sales between the S4 and S5 in the first six months of release.

What is the explanation?

There are a few possibilities to explain this:

1. Consumer Apathy: As many felt the need to point out, the Galaxy S5 ultimately failed to live up to the lofty expectations the tech community dreamt up. Images of QHD screens and liquid metal frames, for example. Some of the missing components, however, were quite avoidable, namely the lack of OIS. Additionally given that Samsung was prepping the Galaxy Alpha around the same time, it’s curious as to why the S5 didn’t feature a metal frame. Were production issues at play here, or was the company simply trying to push the plastic for yet another year in hopes of getting away with it?

2. Satisfaction: The Galaxy S4 was very well received. Despite the widespread bashing of Samsung’s plastic parts, the phone offered top of the line specs and a Full HD screen. Truth be told, there was actually very little to separate the S4 and S5 spec-wise, save for the CPU update, waterproofing, and fingerprint sensor. Whereas Apple has legions of fans that will plunk down cash for a new iPhone every year, it’s possible consumers simply didn’t see enough reason to buy an S5 when their S4 (or even S3) was still satisfactory.

3. Competition: While obviously a factor in this equation, the extent is somewhat up in the air. We all know that Xiaomi had a fantastic third quarter, and Samsung suffered big time, but how many people bought a competitor’s flagship over the S4 is somewhat difficult to determine, especially when the previous two factors are considered. With some devices in particular, such as the OnePlus One, the price is so low that it almost fits into an entirely different market. This factor is probably the largest reason for the sharp decrease of S5 sales in China, where there are so many domestic competitors.

Samsung Q3 2014 Revenue

One thing is quite clear: Samsung is not only facing increased pressure from rival OEMs, but its own device lineup may have reached a saturation point, such that the law of diminishing returns will dictate the next devices can never have the same impact as the earlier ones. Sure, the Galaxy S6 will probably have a QHD screen, may have 3GB of RAM, and will inevitably have a new design. Still, for all those who don’t care about the latest and greatest, there is technically nothing wrong with the current devices. Likewise, why would they need to purchase Samsung at a premium price when cheaper alternatives are available?

For this reason, it makes perfect sense that Samsung has sought to create truly unique products, such as the recent Galaxy Note Edge, and plans to release a foldable smartphone by the end of next year. The company also pledged to cut down the number of smartphone models it manufactures by up to 30 percent and restructure its software efforts. Given the costly nature of this venture however, it’s somewhat questionable as to if these steps are truly going to solve its financial woes.

  • Mr Hindsight

    Still perfectly happy with my G2. Doubt I have any real reason to upgrade next year either.

  • Rick Ituni

    “One market where Samsung sold more S5 units than S4’s is the US.”
    Solid proof that americans don’t think that much to consider before buying things up.

    • Anonymousfella

      People in the US start lining up from midnight for a phone which is an incremental update( and can be purchased in a few days without waiting in a line).What more proof is required?

      • Ivan Budiutama

        this, can’t say it any better, still in topic, maybe one need to also mentioned about the political stability on Internal Samsung itself. Well for the beginning, I heard there are a gap between people still fighting for Tizen and people want to support Android more. These kind of things break and damage the company’s performance more than you thought it would.

        • Anonymousfella

          Yes you’re right. A company needs a clear direction. Maybe that’s why there’s talk of a executives being shuffled at the top

          • Karly Johnston

            If there is one thing Sammy doesn’t have is a clear direction. Their idea of forward is throwing crap against a wall and seeing what sticks.

    • frhow

      I have to agree, I live in the US and while I wouldnt say all Americans, a majority of them have no clue on other phones besides Galaxy and Apple. They are always asking what kind of phone I am using since it “Looks Different” and I am happy to say either G3 or M8 and starting today Nexus 6. They see these commercials and thats all they care about. I personally am tired of explaining to people that the S5 is not the Next Big Thing.

      • Anonymousfella

        The Note 4 is the next big thing and it still wont get as much sales as the S5 smh

        • mohsinleo05

          Note 4 is the best phablet i have ever used. S5 is crap though.

      • guest qwe

        Most walk into some store and buy what the person tells them to based on some ridiculous criteria. . . Or they have to have a status symbol and walk in looking for that particular status symbol, it’s ‘murica.

        Sad. .. but true!

    • MasterMuffin

      Ads and Fox are the best sources of information ;)

  • Vidéki “paraszt”

    Reason: Price and touchwiz

    • MasterMuffin

      Normal customer doesn’t now or care about Touchwiz. Price and wow factor.

  • ryq24

    everyone thought the biggest competitor of Samsung is iPhone but in reality it’s the new cheaper chinese companies. Their the one eating into Samsung market share.

    • Karly Johnston

      The margins come from flagships where Apple dominates. Chinese OEMs aren’t selling enough of the high end to make a dent.

  • Mike Bastable

    I am quite concerned that Samsung still misses the point. Price: it’s an issue. The products are not premium, the build quality is lazy and (Like Sony) their interface has become outdated with over reliance on widgets and gimmicks. Nothing released recently indicates that they have changed direction.
    I think they need to release a wierd ass Tizen handset, go wild be creative, have fun. Then after changing management make sure the S6 has style and substance and sell the thing cheap.

  • Anonymousfella

    “Satisfaction: The Galaxy S4 was very well received. Despite the widespread bashing of Samsung’s plastic parts, the phone offered top of the line specs and a Full HD screen. Truth be told, there was actually very little to separate the S4 and S5 spec-wise, save for the CPU update, waterproofing, and fingerprint sensor. Whereas Apple has legions of fans that will plunk down cash for a new iPhone every year, it’s possible consumers simply didn’t see enough reason to buy an S5 when their S4 (or even S3) was still satisfactory.”
    Nailed it. I had a S4 and saw very little reason to buy the S5…

    • Same, I had the S4 and didn’t see the need to get the S5 because it wasn’t much of an upgrade. I picked up a G3 (huge mistake) and now I have the Note 4.

      • Cole Walter Tague

        May I ask why you say picking up a G3 was a mistake?

      • Bogglefish

        Why didn’t you like the g3?i was looking at one for my next handset

    • Bogglefish


  • Clinton

    Do people in America buy new phones every year or something? I know there is a contract system of using a phone for 2 years but do they buy more often than others. I have had my Galaxy S plus for 2 and a half years before switching to Moto G 2013.
    On Topic though, Samsung is just losing so much because they changed very little to what they were from before. Yes, their phones have been continuously improving, but despite that, those changes seem minuscule to what other companies were doing. I guess people are just getting bored with their (Samsungs’) products (Unless you like Apple XD).

  • Shark Bait

    Priced like a stunner, looks like a hog! #thatswhy

  • John-Phillip Saayman

    I think people got bored maybe. And yes the price didn’t help.

  • J_Pod

    Welcome to where HTC was/has been for a while. Being the dominant manufacturer for a while it’s no guarantee of continued success in the Android phone market. At least HTC looks like it’s beginning to level out is precipitous drop. Samsung I think has a ways to fall yet before it figures itself out again.

  • Bogglefish

    If you already have a s4 there is no point in buying a s5 for a few minor upgrades

  • Steven Morris

    its because the gs5 is a cheap plasticy thing that was only an incremental upgrade. the only samsung product i have considered buying in recent weeks is the note 4 and thats because it exudes premium. i hated the cheap feel of the gs5 especially for something that costs so much.

  • wat

    Because LG

    • Karly Johnston

      Yes, the G3 is hurting Galaxy sales in a meaningful way.

  • eliHd

    I stopped buying Samsung phone when they make the announcement that 1gb gs3 are not getting kitkat only the 2gb ram. Good riddance Samsung!

  • Sam

    Folks, this is a sign to short qualcomm stock. iPhone’s big screen is only going to eat Android market. Folks don’t care too much about super smart features, they care for the basics and big screen. Samsung is just a side effect of this trend, Qualcomm is going to take a hit by mid next year, look for their results.

    • Karly Johnston

      Samsung actually sells more Exynos than QC chips. The thing that will hurt them most is losing an anti trust investigation in China.

  • Ian Huntly

    I was one who saw little value in the S5 and bought a Note 3 for similar money, and very glad I did, even though it needs a lot more power and RAM, which the Note 4 seems to have addressed for heavy duty users.

  • TS

    Don’t forget all the worthless software Samsung shoves down their customers throats. I like my S4 but the software from Samsung is laughable at best. Hopefully Samsung will wise up and quit with all the bloatware.

  • Bob F

    I went from S4 to S5. I was able to creatively upgrade early, so I didn’t get dinged on cost. The screen is the real difference between these two phones. There’s a HUGE upgrade going to the S5.