Korean tech giant Samsung Electronics Co. expects record shipments of its new flagships to fuel its first profit gain in seven quarters in the three months ended June following a raft of positive reviews of its new metal-bodied premium smartphones.
The S6 may reach sales of 50-55 million units this year, beating its two predecessors that were criticized for their plastic casings, similar appearance and Android OS stuffed with Samsung applications. The S4, which was unveiled in 2013, accumulated first-year sales of 43 million, while Samsung shipped only around 38 million units of the S5 model, analysts estimate. The Galaxy S3, considered as the tech giants best-selling model overall, has sold about 80 million units since its debut in 2012.
Keon Han of Credit Suisse Group AG in Seoul, one of the top-ranked analysts following Samsung, said, cited by Bloomberg: “The market, carriers and even consumers are all on the same page that Samsung’s new phone is different from the past models. S6 is the best made phone by Samsung in terms of design or specifications.”
The tech giant faces high stakes with its new line-up following the S5s mis-launch in 2014 and as Apple bet on larger screens that drove record sales and challenged Samsungs dominance in the market for high-end smartphones, having delivered more than 74 million iPhones in the three months through December. In the low-end segment, meanwhile, Chinese and Indian competitors eroded Samsungs market share by flooding the market with affordable devices of decent quality priced well below Samsungs comparable smartphones.
The new S6 models, both the flat and the curved one, will have 5.1-inch screens, positioned between those of the iPhone 6 and 6 Plus.
J.K. Shin, Samsungs mobile chief, declined to provide shipments projections at a media event in Seoul, but said he anticipates sales to top those of the S5. The company expects the flat-screen S6 to outsell the costlier S6 Edge but high demand for the curved-screen smartphone and its more difficult manufacturing process will lead to supply shortages in the near term.
Analysts have voiced concerns that troubled supply of components could impede Samsungs comeback. The company estimated this week its January-March operating profit to be the highest in three quarters, which has been partially attributed to the decision to use its own chips in the new devices.
Mr. Shin confirmed that the Korean company has decided to go with its own mobile processor and modem chip in the Galaxy S6, instead of once again relying on components from its “close US partner” Qualcomm Inc.
“We have to use the best engines to make our products competitive,” Mr. Shin said. “But we may very well end up using products from Qualcomm again in the next Galaxy phone.”
The S6 line-up goes on sale in 20 countries on Friday, including the US, UK and Germany, while becoming available for Chinese buyers starting April 17th. In the US, the two S6 models will be offered by all major carriers, the company said.
Samsung Electronics Co. rose 0.27% on Thursday in Seoul to close at KRW 1 483 000. The company is valued at KRW 218.4 trillion.
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