Samsung Electronics recently released its second-quarter earnings estimates and as expected, the South Korean manufacturer called for significant drops in revenue and profits based on what one report claimed was a gross miscalculation of demand for the Galaxy S6 vs. the Galaxy S6 Edge. The company said that for the June quarter, it’s estimating revenue of 48 trillion won ($42.35 billion) down 8.4% year-over-year. The operating profits fell 4% to 6.9 trillion won (just under $6.1 billion). The final results are said to be published later this month.
The South Korean electronics manufacturer didn’t reveal any numbers but a source told The Wall Street Journal that the company originally organized S6 production assuming that it would sell four regular S6 models for each S6 Edge. It should be noted that the latter is more expensive but has a unique curved display, one which enables extra features. The source went on to explain that in reality, the demand for the two devices was closer to even. This created a surplus of unsold S6 units, especially white ones, while leaving demand for the Edge unfulfilled.
The claim appears to be consistent with a statement by Samsung mobile head, J.K. Shin, who in April just a few days before the S6 phones launched, announced that the company would raise Edge production to meet demand.
Apple likely would have experienced a similar issue, just not as severely with the iPhone 6 and 6 Plus. Shortly after the launch of the two phones in September 2014, reports did indicate that Apple had underestimated demand for the 6 Plus and was scrambling last minute to adjust production accordingly.
We’ll have to wait until Samsung releases the final results later this month to find out more.
Source: The Wall Street Journal
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