Samsung predicts another profit decline after underestimating demand

BY Killian Bell

Published 7 Jul 2015

Samsung Galaxy S6 Edge - front view

Samsung has predicted yet another profit decline for the second quarter of 2015 after it underestimated demand of the new Galaxy S6 edge. The South Korean company expects an operating profit of KRW 6 trillion, which is a 4% decline over the same period last year.

Samsung expects overall sales of KRW 47.1 trillion for the three-month period. The drop is said to be a result of weak smartphones sales, according to sources familiar with the matter, but Samsung is yet to confirm how its various divisions performed individually.

The company has admitted, however, that it underestimated sales of the curved S6 edge. It expected the regular Galaxy S6 to be a whole lot popular; it actually predicted it would sell 4 S6 handsets for every 1 S6 edge. But demand for the S6 edge has been about equal.

As a result, Samsung has been sitting on lots of unsold Galaxy S6 handsets, while it could not manufacture the S6 edge fast enough to meet demand. This means it didn’t sell as many devices as it could have during the second quarter.

Samsung has since set up another factory to handle S6 edge demand, but it previously said it did not expect to meet demand until the end of June. Thanks to the S6 edge’s curved screen, the device takes longer to manufacture than the regular Galaxy S6.

This will be the seventh straight quarter Samsung has seen its profits fall.

[via SamMobile]