It may still be a name to reckon with and its prolificacy has not been in question, but South Korean brand Samsung has been losing its mojo so to speak, with Chinese brands making their mark in the international market and of course Apple continuing its iPhone onslaught. However, with the release of its latest flagship smartphones, the Galaxy S7 and S7 edge, it looks like the numbers are looking up and are better than expected.
Initial estimates for Samsung was that they will ship 7 million units of the Galaxy S7 for the first quarter of 2016. But according to analysts at Korea Investment & Securities, the numbers will most likely be around 9.5 million units, therefore causing brokerage firms to upgrade their forecasts. Probably because of this news as well, shares for the brand rose up to 2.4% last week and this was an 18-week high. Whereas the last three months of 2015 saw a 22% slide, by mid-January of 2016, their stock has been up by more than a fifth.
Several things may factor into this better than expected numbers for the Galaxy S7. For one, there has been good reviews for the new flagship, although there are only several improvements and differences from the previous one. But reduced component and development costs have allowed Samsung to sell the new device at a lower price. Another probable reason is the decision to release it earlier, therefore there is no new iPhone to compete with in the market.
But at the end of the day, this doesn’t mean that Samsung is out of the woods yet. A survey of 31 analysts say that their January-March operating profit is still down 16% ($4.51 billion) compared to last year and this is the lowest in six quarters. These numbers would have to be adjusted based on the new shipment figures in, although Samsung refuses to give a final one since earnings for the first quarter haven’t yet been finalized.
VIA: CNBC
