With its flagship phone series flailing, Samsung has indicated that it is thinking about trimming the prices of the Galaxy S6 and S6 Edge.
Samsung has reported another underwhelming quarter, during which production issues dampened the relatively low demand for the months-old Galaxy S6 series. However, Samsung pointed to poor sales of older handsets as the mobile division's larger problem.
"Overall revenue increased slightly as [average sell price] improved due to the expansion of S6 sales; profit increased marginally [quarter over quarter] due to the decrease of mid/low-end smartphone shipments and increased marketing expenses," said Samsung [pdf].
To combat what Samsung projects to be another rough quarter, the South Korean tech company stated that it may have to adjust the price of the S6 series while it works to refresh its lineup of mobile devices.
"Sales momentum for high-end products will be maintained by adjusting the price of the Galaxy S6 and S6 Edge and introducing new premium smartphone models," Samsung said.
Despite an 8 percent drop in net profit, down to $49 billion, Samsung's component business received a bump from the S6 series, noted Lee Seung Woo, an analyst at IBK Securities in Seoul. However, even its component business is at risk, Woo added.
"Sales of S6 devices are expected to shrink further in the third quarter and its smartphone slump could spill over to other component businesses, including chips," Woo said.
Struggles in the mobile market have been accentuated by an ongoing loss of ground particularly in China. The problems of its older mid and low-tier phones and the underperforming S6 series are, at least in part, a result of the rise of Apple in Asian markets in the premium segment and emergence of mid-tier entrants such as Xiaomi and Micromax.
"During this quarter, local brands and Chinese vendors came out as the key winners in emerging markets," said Anshul Gupta, a research director at Gartner. "These vendors recorded an average growth of 73 percent in smartphone sales and saw their combined share go up from 38 percent to 47 percent during the first quarter of 2015."
While Samsung has been losing ground, Gartner expects the company's "drop rate to be slower than" in recent quarters.
