Samsung sees strong sales in Galaxy S7

Mar 22, 2016

Samsung Electronics' latest Galaxy S7 smartphones ― one flat and the other one curved ― have registered healthy sales since the products were made available globally, raising hopes that the company's mobile division will generate more profits than expected.

On Sunday, market analysts and officials said that initial sales and preorders of the new Samsung phones in the company's key markets in China, Europe and India have beaten previous expectations.

They told The Korea Times that the company's decision to support a microSD slot and improve waterproofing, as well as enhanced camera features with a cut in the suggested retail price, have been helping consumers return to Samsung handsets.

"With a little design overhaul compared to the S6, Samsung added several consumer-friendly hardware features such as a revival of the microSD slot," Shinhan Financial analyst So Hyun-chul said in a report to clients, Sunday. "So far, S7 sales are looking very good."

The local brokerage expects S7 sales to exceed those of earlier models.

"Profits at Samsung's mobile division will be much better than earlier expected," So said.
The S7s have been available since March 11, globally.

Sources said combined preorder sales since the launch of the devices in Europe have shown a 250 percent increase over those of the S6.

In China, Samsung broke the "10 million mark" in preorder sales for the devices since March 11 with JD.com, one of China's top online shopping malls, and Suning, a major electronics retailer, receiving about 6.4 million and 1.4 million preorders on the two.

Since last year, Samsung Electronics has been refusing to provide sales figures of its flagship Galaxy devices.

But in rare remarks, its mobile chief Ko Dong-jin told local reporters, "I've gained confidence to do well after checking responses from major retailers and holding meetings with carriers in China."

The S7 smartphones are available with about a 10 percent cut in price despite the fact that the mobile phone is outfitted with powerful processors and other advanced hardware technology.

Recovery in China

A slowdown in smartphone sales has negatively impacted Samsung. Operating profits from Samsung's mobile unit fell 7 percent in the fourth quarter of last year, according to the company.

Samsung said the fourth quarter was filled with challenges for the mobile business.

"Competition intensified from Chinese handset makers, which are busy to offer similar technology at lower prices," said a source. "Samsung doesn't have plans to drastically cut the price of the S7, but plans to introduce wow additions such as virtual reality."

"Samsung did a good job on the final touch," said one source that runs a business in China. "When you see the S7, this looks like a nicer camera. Samsung is proving that it could attract customers even with minor surface changes. This is appealing to customers in China."

In China, which is the world's single biggest smartphone market, Samsung was ranked sixth with a 7.7 percent market share last year under aggressive support by local telecom carriers of the country's leading handset manufacturers.

Despite the challenging environment, Samsung is looking to maintain a "double-digit" margin in the mobile business by putting advanced hardware features in its flagship and mid-tier smartphones for an affordable price.

Analysts are saying the success of the S7 will benefit the company's semiconductor and component supply chains, as more sales will keep its semiconductor and component factories busy.

 

Source: Korea Times