Samsung’s mobile business has been having a rough year – it’s still one of the biggest and most profitable players in the Android ecosystem, but profits are down. That can be attributed at least in part to lower than expected sales of the company’s flagship Galaxy S5. The Wall Street Journal reports that Samsung increased production by 20 percent relative to last year’s Galaxy S4, but that it actually sold 40 percent less than it expected to. The S4 sold around 16 million phones in its first three months on the market, compared to just 12 million for the S5.
Samsung was becoming far too dominant, so I’m glad they’re being taken down a notch on both the high and the low end. Other Android manufacturers (and Apple, but that’s nothing new) are putting the squeeze on Samsung, and that leads to more choice for consumers, as well as lower prices, and in many cases, better quality for the same or less money.
We all benefit.
So that 40% figure is almost meaningless. Who cares about expectations?*
The 12 vs 16 million for S5 vs S4 is a somewhat better measure, but that’s just over the course of a quarter. Quarterly financial reporting rears its retarded head once again.
* And who are the stupid investors who believe what a company say they expect?
Investors.
So what’s wrong with comparing same quarters year over year?
You can see that I pre-empted your answer already
The problem is treating everything in terms of quarters in the first place.
No you haven’t. Clearly you don’t follow the market if you think company projections aren’t important.
All of this is beside the point. Are you really trying to argue that a 40% decline in sales of the flagship device is not a really bad sign?
Edited 2014-11-25 21:01 UTC
It’s not a decline in sales. The decline in sales is the 4 million.
40% is against the EXPECTATIONS.EXPECTATIONS ARE NOT SALES.
I get what your saying… But frankly the investors who tend to believe what the company says (the ones that matter) are all on the board of directors – and the guys who set the expectations wrong often find themselves fired because such things tend to make the stock price drop (just as it did in this case – down about 2%).
It doesn’t matter if there is a “real” problem or not, because most investors (i.e. the ones who are not on the board) are twitchy, nervous little turncoat bastards and tend to sell at the slightest hint of trouble
Perception becomes reality…
Just saying, in the myopic view of the corporate overloads who measure their money in dump truck loads, it matters a great deal. To someone trying to objectively analyse the health of a company? Not so much.
ps. I’m not trying to condone this kind of hyper-reactionary market stuff, just making an observation. I agree with you that it doesn’t necessarily mean anything at this point, but the board of directors is in the best position to determine that. If they do in fact start replacing key management (which is what the WSJ article indicated) then it may be a sign of other unreported problems.
Edited 2014-11-25 06:17 UTC
In the case of Samsung -investors have acted way ahead of the tech-bubble, this Samsung ‘miss’ was anticipated and reflected in the stock price months ago.
It might be best to leave the financial analysis to the experts. If you want to completely re do all financial reporting, good luck to you, but you’re one the wrong site.
Safe to say Samsung isn’t doing as well as it had expected, but still selling a ton of phones.
The experts predicted more sales than was actually made. I question their expertise based on their own facts.
The big question is, will the app-phone market become saturated just like all other consumer markets for electronics eventually become?
I am looking forward to seeing whatever they invent to replace the phones of today.
Disclaimer: I do not currently own a cell-phone and have opted-out of using one since 1999 by only using land lines and voip.
Within 2-3 years. The flagship of 2020 will probably cost <<$200 and ordinary smartphones ~$25.
Making big prophet is not that upset that didn’t sell what they wanted to sell, this is what is called bs news. If you making prophet is good so you can have money in the bank to help the company but how much money do you need to store away.
Most consumers just realized what sh*i Sammy puts in their flagships (excellent CPU and screen are just red herring from scandalous flash memory , s*tty software that rots, buggy updates if any) and chose some other manufacturers for their next device.
I hope heads of some execs responsible for this fiasco will roll in effect.
All I want is a factory-unlocked S5 – or even a default software install closer to what HTC is doing would help. Is that so much to ask?
Edited 2014-11-25 10:12 UTC
I guess S5 is no better. I saw their screens badly burned out after just couple of weeks playing demo in the shop.
The lags are still there despite omnipotent CPU. I dunno about flash, but the GT-N7000 trim fiasco gave me a tough lesson to avoid Sammy stuff
That’s just stupid. Do you believe that only Samsung’s stuff can have defects? Or that they do it on purpose? How many of their other devices have had the same issues as the GT-N7000? I certainly haven’t heard any of the other devices having the same issue.
I mean, avoid faulty product lines, sure, but *every manufacturer makes mistakes* so you’re only shooting yourself in the foot if you use that as an excuse to avoid the manufacturer competely. You’d have to avoid every manufacturer in the whole world in a short order.
It’s ok to make mistakes given you take responsibility for them. Those devices should have been recalled.
And I’m not only talking about the danger of bricking the device during legitimate factory reset.
I’m talking about non-working trim which made the device pretty useless after a year of intensive use.
This for a flagship, not some throwaway $100 toy.
Yes, and my point still stands: nearly every manufacturer has done mistakes at one or another point with a flagship product, Samsung is no different there from any other manufacturer.
Let me ask you a question: has Samsung made the same mistake on any following products? No? Then why is the TRIM-bug a reason to avoid their newer products, even when they seemingly learned from their mistake?
There is no doubt in my mind that it will only get worse in the future! But not only for Samsung.
1) The market will soon slow down as soon as most people have some sort of smart phone.
2) Samsung, Sony, LG, HTC are getting a lot of competition these days from Chinese makers. Forget Lenovo and Huawei (although they will do well for a while as the brand is recognised), cue Xiaomi, Jiayu, Meizu, Elephone, Oppo, Doogee, Cubot, Zopo, OnePlus, and many others.
These manufacturers all sell great phones for around 150-200 dollars and super phones for 300 USD.
And you can buy them through many Chinese online shops or these days they open European online shops.
America will be the last bastion left, because of the carriers.
But sales are picking up really a lot here in Europe – for instance Cheap Chinese Android Phones is one of the most discussed threads on my ‘local’ forum.
Edited 2014-11-25 13:38 UTC
With every generation the jump in technology is diminishing. And other manufacturers, especially in China, are getting their act together for making a decent end to end product. The chinese can’t seem to write a decent phone OS (any embedded os really) and google android mostly gave them what they needed mostly for free.
It also doesn’t help that samsung started locking their bootloaders. Although I’m not sure what percent of the market even cares about that, probably not much in the US.
Me personally I want a phone that has a reasonable amount of ram and battery life, can take a mini-sd card, has a user replaceable battery and has active android custom rom development community. That used to be samsung.
Edited 2014-11-25 17:39 UTC
In other words you want a few you can use for several years. But, that’s not what they want to sell you. These companies would prefer you buy a new phone every 2-3 years max.
You are completely right.
My Android tablet is stuck with Android 3.2.1 and does not get any love, not from the manufacturer and not from Google.
Therefore apps that interests me can’t be installed because they need at least Android 4.
Don’t want to start a flame war here, but even iPhone 4S owners are able to install iOS 8.1.1. ( Not talking about performance here
)
Bottom line:
Yes, smartphones are nice, very nice gadgets.
However manufacturers want you to buy a new one every two years.
Why?
Because they can.
Apart from the investors p.o.v., I had the S5 since it’s out, and it’s a good phone. However, I just bought 2 Moto G (2nd Gen) for Mom & Wifey, and I would just as well have a Moto G than a S5, as I use my phone basically to FB, Whatsapp, browse the web a bit, Google Calendar, and yes, sometimes I even use my phone to make phonecalls
I mostly never install any apps other than the usual suspects… The less is the best.
That said, I enjoy taking photos, and the S5 is good for that