Despite recent releases of new products such as the Samsung Galaxy S5 at the beginning of April, Samsung Electronics has reported a recent drop of 4% in its mobile sales. The company’s sales have fallen lower than usual recently, and this has been the first time in five quarters that Samsung has seen this type of a dip.
Samsung’s line of Galaxy Smartphones has been one of the leading key factors that has helped to drive the company’s monetary growth in the past few years. The Galaxy phones helped Samsung to knock Nokia out of the top spot as the world’s biggest mobile phone maker as demand for the new Samsung phones skyrocketed, and Samsung became the biggest mobile phone maker themselves – holding on to that position to this day.
However, competition in the sector has been increasing, and this is forcing manufacturers to lower their prices, which in turn hurts their overall profits. Technology analysts speculate that the decrease in sales, however, may not be an all bad thing. This new report shows that the demand for smartphones in developed markets has clearly begun to slow down. So far the developed markets have been the key players in aiding in the smartphone growth sector. Samsung mobile sales falling lower than usual, despite the recent releases of new products, especially high-tech ones like the Galaxy S5, shows that the global market for smartphones has really begun to develop and started to fully mature. This is evidenced by the fact that a huge company such as Samsung, one of the largest suppliers of cutting edge mobile phone technology, is seeing a decline in sales and not having quite the peak growth pace that it has in the recent past.
Another thing to consider is that Samsung may also be losing out to Chinese phone makers in emerging markets, who are creating new devices packed with features for only a portion of what Samsung charges for its devices. This is the first time in Samsung’s history that it is primarily dependent on its mobile phone earnings for its business profit. According to Business Weekly, Samsung phones account for about 76% of the company’s total income currently. Main Samsung competitor, Apple, is also looking to boost its sales to get ahead of Samsung and compete with its Galaxy line of phones. Apple is increasing sales of its ever-popular iPhone through China Mobile Ltd., giving Samsung some tough competition. Additionally, other overseas companies are offering cheaper phones that still have all the features for customers who are not looking to spend an arm and a leg for their mobile device.
Samsung is famous for its phones’ larger screens, and Apple is looking to compete with this too by releasing a phone the next time around with a bigger screen, since bigger seems to be better as far as phones go these days. Still, even with the Samsung mobile sales falling lower than usual despite new product releases, Samsung said that it still expects its newest addition, the Galaxy S5 to outperform its predecessor, the Galaxy 4, in sales.
By Laura Clark