Samsung drops $10 billion in market value on poor demand for Galaxy S6 phones

“Sluggish sales of Samsung Electronics Co.’s Galaxy S6 smartphones helped trigger a share decline that wiped more than $10 billion from its market value in July — almost twice the capitalization of local rival LG Electronics Inc.,” Jungah Lee reports for Bloomberg. “The stock dropped 6.6 percent this month as the world’s biggest smartphone maker posted its fifth straight profit decline and said it would cut prices for its new high-end devices less than four months after their debut.”

“Samsung’s global smartphone market share fell more than 3 percentage points in the second quarter amid surging sales of Apple Inc.’s iPhones and tougher competition from Chinese vendors,” Lee reports. “‘I don’t see a clear answer for its smartphone business,’ said Marcello Ahn, a Seoul-based analyst at Quad Investment Management Co. ‘The vacuum of its business momentum will persist throughout this year and even into next year, giving investors less reason to snap up shares.'”

“Samsung will be ‘adjusting’ prices for the S6 and S6 Edge to maintain sales growth, the company said Thursday after reporting that net income, excluding minority interests, fell to 5.63 trillion won ($4.9 billion) in the three months ended June,” Lee reports. “That missed estimates and prompted the biggest decline in shares in four months.”

MacDailyNews Take: So, in order to keep the unit count up, move from from low margins to no margins or even to losing money on every sale? Genius business move, patent- and trade dress-infringing slavish copier! Genius!

“The 6.6 percent decline wiped out more from Samsung’s market value that the company has ever posted in quarterly operating profit,” Lee reports. “Samsung will add more middle- and low-end models, and cut spending in the phone division, it said.”

Read more in the full article here.

MacDailyNews Take: “Samsung will add more middle- and low-end models, and cut spending in the phone division.” Translation: Samsung can’t compete with Apple’s iPhone.

They never could.

Thermonuclear
Thermonuclear.

 
SEE ALSO:
Samsung will never overcome Apple’s advantage in mobile device profitability – July 30, 2015
Apple iPhone shipments show impressive growth as Samsung falls – July 30, 2015
Samsung offers downbeat outlook for year ahead of new Apple iPhones – July 30, 2015
Apple’s indomitable iPhone 6/Plus sales unfazed by Samsung’s anemic Galaxy S6/Edge – June 2, 2015
iPhone 6, killer: Beleaguered Samsung’s Galaxy S6 sales are a total disaster – May 22, 2015
Beleaguered Samsung reports 30 percent decline in operating profit – April 28, 2015
Samsung Galaxy S6 phones suffer weaker than expected sales in South Korea homeland – April 22, 2015
15 percent of Samsung Electronics execs quit amid profit slump – April 2, 2015
Significant Android to iPhone switching weakens market for Samsung Galaxy S6 – March 24, 2015
Apple iPhone takes smartphone market share from Android around the world – March 4, 2015
Poor man’s iPhone: Android on the decline – February 26, 2015

16 Comments

  1. Looks like we now know where did Steve balmer go with his “genius” business decisions.
    Samsung is moving exactly like Microsoft now, making decisions to try to compete with apple with out worrying about putting money in a war they can’t win and all that just for a $tupid business proud.

    1. Claims that short supply of the Edge caused Samsung’s declining smartphone businesses pure SMOKE SCREEN.

      I’ll bet everybody at Apple is laughing their asses off over that claim. Samsung, and the whole Android community for that matter, are well known for copying iPhone and introducing features nobody really wants.

  2. Since MDN’s take on this is filled with such Apple “devotion”, if there were an equivalent Samsung “devotion” (thank goodness there isn’t) one could say that Samsung can afford to get out of the handset business altogether. Can Apple?

    1. Since you ask, short answer is YES. Apple was big enough before the iphone, the iphone just came to make apple BIGGER no to save it.
      Let me add that samsung can easily get out of the handset business because they almost have no handset business, that division was profitable (a little ) before with the features phones. But know that they have to spend a lot of money in a iphone replica and sell it for so little, they make so little profit out of it.
      Apple can afford getting out of the handset market, can samsung afford losing apple as a customer? that would be a better question.

    1. I think Apple’s market cap loss is near $100 billion over the last few months. It’s outrageous this has occurred given the fact that Apple has significantly increased YoY earnings.

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