Samsung Sees Low Galaxy S5 Sales

By Helen Vince
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Mobile Market – Samsung’s flagship Galaxy S5 sales are 40% down on projected sales with just 12M sold in July, that’s 4M units fewer sold in the first three months than the predecessor Galaxy S4 and the company is losing no time in reacting to the news.

 The Wall Street Journal Headline reports that the Korean technology giant is considering shuffling top ranks at the company that has dominated Android smartphone devices and proved a worthy rival of Apple’s iOS juggernaut. The WSJ article references JK Shin, leader of the high profile mobile division at Samsung, but recently under fire for the triple whammy of eroding market share, eroding profits (down 60% in Q3) and eroding stock prices.

But the Galaxy S5 does not have the luxury of competing in a pre-iPhone 6 and 6 Plus world (like the S4 did) with Apple now shipping its large display smartphone and “phablet” that directly compete with the S5 5.1″ AMOLED display. The company has won high marks on its technology launches and the S5 is no exception wining a coveted 4.5 of 5 star rating from CNET (and 4 out of 5 from Engadget.com). TechRadar.com said the smartphone had “fantastic specs and an amazing screen”.

Samsung may have bifurcated its force with the dual track of large display smartphones and (relatively) smaller “phablets” including the successful Galaxy Note 4, that includes a highly accurate (passive) stylus pen (Wacom) as well as capacitive touch interface.

Some see the drop in sales at Samsung as directly tied to the Apple large screen display effect that saw the company finally launch a smartphone larger than the 5S (that purportedly is the ideal size to use with one hand). The company delayed moving to larger screen sizes as the dimensions were seen as a sacred cow and carry over from the Steve Jobs era. But Apple saw the writing on the wall with strong sales from rivals Samsung and others, particularly in sizes north of  the 4″ diagonal standardized by Apple for multiple generations.

And some think Apple is also not immune to lower smartphone sales. A report from KGI Securities analyst Ming-Chi Kuo suggests that after the holiday boom for Apple, it expects the Q1-15 sales to “plummet” and uses terms like “bleak” to describe the coming quarters of sales for Apple. After a Christmas surge, of up to 71.5M units, in Q4, the group expects that number to drop to under 50M in Q1-15. He also predicts that the iPhone 6 Plus “phablet” will be outsold by the smaller 6 model largely due to the ghost of Steve Jobs coming back to haunt the company. Ming said it is because the device can’t be used in one hand like the 6, that will drive popularity and sales beyond the 6 Plus, that is now back ordered (more popular) than the 6.

Meanwhile, Samsung’s reported shuffling things at the top of its mobile device division, with co-chair JK Shin expected to give way to BK Yoon, who overseas the TV (and home appliance) divisions. He is in line to handle both lines of consumer devices in a move that will “streamline” the divisions, according to WSJ. The third co-CEO at Samsung is KwonOh-yun who runs the components division, semiconductors and display panels.

Display Central Comment

So look to the Galaxy S5 Sales to continue to drop in the heat of intensified competition from chief rival Apple, as both companies potentially face a smartphone slowdown. But perhaps it’s time for the high-end smartphone market to stop and take a look around. New sensor devices, wearables, are looming on the not too distant horizon and are considered to be THE HOT Ticket this holiday season. If that is the case, the computer in your pocket may just stay there as users begin to upgrade to other connected devices, with little smarts, and lots of sexy features, like way long battery life and sensors to get you all the data you didn’t know you can’t live without. We’ll see. – Steve Sechrist