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Samsung expects mounting challenges for mobile as smartphone shipments drop in second quarter

Samsung Galaxy S6 Edge top angle
Giuliano Correia/Digital Trends
It was Samsung’s turn to report the results of the company’s second financial quarter for 2015 earlier today, and we wouldn’t blame you for being a bit worried about the company and its mobile division.

Starting with the company as a whole, Samsung reported a total revenue of $41.5 billion, a 3 percent increase from the previous quarter. However, Samsung’s total revenue for the second quarter is still more than 7 percent lower than that of the same time period in 2014. Samsung’s overall operating profit saw a more significant increase, going from $5.1 billion in the first quarter to $5.9 billion in the second quarter. Again, though, profit is still down 4 percent year-on-year.

Looking solely at Samsung’s mobile division delivers a darker picture, with profit only marginally increasing from $2.34 billion to $2.36 billion quarter-over-quarter. Unfortunately, this represents a significant 37.4 percent dive in profits year-on-year, with the second quarter of 2014 itself representing an almost 30 percent drop in profit from the same period in 2013, showing how much Samsung has fallen over the years.

Meanwhile, the trend continues with quarterly revenue, with Samsung seeing a slight increase from $22 billion $22.2 billion quarter-over-quarter, though second quarter revenue in mobile saw an almost 9 percent decrease year-on-year.

The news don’t get better when it comes to phone shipments, with the company reporting an overall drop in shipments due to lower demand of “older middle- to low-end models,” regardless of the fact that Samsung saw “increased shipments” of the Galaxy S6 and Galaxy S6 Edge. Of course, competition like Xiaomi and Meizu, arguably the two most powerful companies in China, made it their business models to provide plenty of power at attractive price points, possibly making Samsung’s midrange offerings seem somewhat underpowered and overpriced as a result.

Samsung financials second quarter
Image used with permission by copyright holder

In addition, even though Samsung solved the supply chain issues regarding the Galaxy S6 Edge, the company says those issues prevented shipments from being higher.

In a related note, Samsung warned investors and analysts of “mounting challenges” for the second half of the year, with the company’s mobile business expected to have its growth stinted due to a “difficult business environment.” In order to stem the tide ever so slightly, Samsung plans to “adjust” the price of the Galaxy S6 while continuing to release premium devices throughout the remainder of 2015.

It’s clear that the Samsung of old is unlikely to return, and we can only hope the company, unarguably the biggest money maker in the Android space, apart from Google, keeps things in the black moving forward.

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