Samsung Electronics Co.’s second-quarter earnings estimates Tuesday suggest that sales of its new flagship smartphones were significantly worse than expected.
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The disappointment underscores the perils of navigating the fast-changing smartphone market: even with a hit product on its hands, the South Korean company appears to have misjudged demand.
The South Korean technology giant said that it expects to earn just $6.1B in operating profit for the three months ended June 30, a 4% decline from the same period a year earlier. - The overall year-over-year profit and sales declines come amid likely robust growth in Samsung’s semiconductor operations, leaving most of the blame for the slide on the company’s once-highflying mobile division. -
Samsung appears to have badly miscalculated in its expectations for what kinds of smartphones these consumers were after.
According to a person familiar with the matter, the company initially expected to sell four Galaxy S6 smartphones for each Galaxy S6 Edge that it sold, and set up its production facilities accordingly. Instead, demand was much likely closer to even for the two devices.