Samsung phone sales are up, but revenue is down

by: Nirave GondhiaNovember 2, 2015


A couple of years ago, Samsung was the undisputed king of the smartphone industry but in 2014, the increased competition in the smartphone industry resulted in it losing its grip on the throne. Impressive flagship devices from its rivals coupled with the Galaxy S5 which tanked resulted in the start of a crisis at the Korean OEM but one year on, the company has somewhat righted the decline.

Samsung devices in video:

This year saw Samsung release a range of new phones including its Galaxy S6 flagship family and it seems to have worked according to new data from Counterpoint Technology Market Research. In the third quarter of 2015 ending September 31, Samsung reportedly shipped 84 million smartphones, which is a 6.3 percent increase on the same period last year and more than its key rivals – Apple and Huawei in second and third respectively – combined.

However, while the increase is good news, the joy may be short-lived as it’s not the Galaxy S6 family that’s driven the increase, but rather, Samsung’s lower-end phones. Counterpoint said that while 55% of Samsung’s sales in Q3 2014 were priced at $301 or more, this reduced to 40% in Q3 2015. Instead, phones priced at less than $200 were behind the increase and now account for 38% of overall shipments, compared with 30% last year.

A key part of Samsung’s decline last year was high prices for its devices coupled with increased competition from low-cost smartphones from Chinese players such as Xiaomi and Huawei. This year, Samsung’s Galaxy J series – and in particular, the Galaxy J5 – is believed to have been a big factor in increased sales of budget devices and shows that Samsung is willing to price its devices competitively and fight for volume over higher revenues.

Galaxy S6/Note 5 family in video:

Whether it works for Samsung or not remains to be seen but the volume market may work for the company. In its heyday, Samsung’s profit margins were regularly between 15 and 19 percent but during its big decline last year, they collapsed to 7 percent. Samsung has promised its investors that the margins will rise up above 10 percent and during the third quarter, the company’s margins came at 9 percent.

Selling cheap phones won’t increase Samsung’s margins but it will put more Galaxy devices in more hands and this may lead to an increase in higher end sales, resulting in an increased margin. Either way, Samsung looks set to have a much better year, this year and the decline of last year could yet prove to be nothing more than a temporary blip.

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  • saksham

    i dont think samsung can ever run out of money as samsung electronics isnt the only thing the company is involved in
    they have various more profitable businesses such as samsung steel exchange , samsung biologics , samsung petrochemicals etc

    • Sebastian Bartlett

      Well Samsung Electronics isn’t just phones, actually a bit less than half is so no worries in that company alone let alone all the other divisions

      • Karly Johnston

        Semiconductors rise while phone revenues fall, that is one way to diversify.


    The price of these GALAXY’s is too damn high

    • SnakeSplitskin

      Ok, I want to disagree with you. The Galaxy phones are priced
      according to the value they provide. However, your picture pretty much
      drowns out any opinion i might have on the matter. And I can’t help but


        Which photo? Avatar or the image attached?

        I think that Samsung phones could be priced a little bit better

        • SnakeSplitskin

          the one of Jimmy McMillan

  • SnakeSplitskin

    Unfortunately, this article leads one to believe that their flagship devices didn’t sell well. This is far from true. The Galaxy line is selling quite well. Just because Samsung was able to increase sales by 6% thanks mostly in part to their sub-$200 phones, doesn’t mean their top-end phones didn’t sell well. This just means that they’ve successfully tapped into a sub-$200 phone market in addition to a market they were already selling to.

    If Samsung sold 1 million Galaxy phones (S5/Note 4) which accounted for 55% of sales but then sells 2 million Galaxy phones (S6/Note 5) accounting for only 45% of sales, does this mean that the Galaxy line is losing steam? Heck no! Yet you would never get that impression from this article. Percentages are meaningless without qualifying what’s behind them.

  • basejumpbr
  • The-Sailor-Man

    Bashing Samsung must go on.

  • Karly Johnston

    You are witnessing the death of Galaxy S series and the rise of J and Tizen.

  • #Note5 IsBoss

    As usual Note5 and S6Edge+ out sold any other android handset as usual. Matter of fact combine Htc, Motorola LG and Nexus handsets and the Note5 and S6Edge+out sold those crappy handsets so easily it’s comical.

    • squiddy20

      Too bad:
      1. The article clearly says there was a decrease in phone sales priced $301 and above (so, that excludes your “boss” Note 5 and S6 Edge), and
      2. You stated the same thing in different ways, twice. Good job, moron.