Fri, Apr 10, 2015 - Page 13 News List

Samsung expects record Galaxy sales

THE NATURAL EDGE:Samsung hopes its new S6 line will drive a turnaround in handset sales, and says it will not be able to keep up with demand for the S6 Edge

Reuters, SEOUL

A line of Galaxy S6 Edge smartphone devices are displayed following its launch at a Samsung Electronics Co news conference ahead of the Mobile World Congress in Barcelona, Spain, on March 1.

Photo: Bloomberg

Samsung Electronics Co Ltd expects record shipments of its new Galaxy S6 smartphones and said it would struggle to meet demand for the curved-edged version due to production constraints, adding to hopes for a turnaround in handset sales.

The S6 models are widely expected to sell briskly following a string of positive reviews, boosting prospects for an earnings recovery this year.

This week, the company estimated that its first-quarter operating profit would be its highest in three quarters, which analysts said was partly because Samsung put its own chips in the new smartphones.

Samsung expects the flat-screen S6 to sell more than the higher-margin S6 Edge — which is priced about US$120 more in South Korea.

However, Samsung mobile business head J.K. Shin said yesterday at a media event that the firm would not be able to keep up with demand for the latter model in the near term because the curved screens are harder to manufacture.

“Some carriers are switching existing orders to get more of the S6 Edge, and it looks like demand for the model will exceed supply throughout this year,” HMC Investment analyst Greg Roh said.

“That means average selling prices will fall at a slower rate, which will have a positive impact on Samsung overall,” the analyst added.

Samsung has not disclosed its shipment record for a handset.

Analysts regard the Galaxy S3 as its best-selling model overall, although they estimate the Galaxy S4 to have done better in its initial year, when a model is most profitable.

Nomura estimated that Samsung sold 80 million S3s in the three years from its 2012 launch, and 43 million S4s from the model’s April 2013 launch to the end of that year.

Some analysts say Samsung could ship 50 million or more S6 phones this year.

Shin also said the South Korean electronics maker is preparing a variety of wearable devices, including a new version of its Gear smartwatch, but did not give specifics.

Samsung’s archrival, Apple Inc, is scheduled to roll out its much-anticipated smartwatch on April 24.

Shin said that Samsung opted for its own mobile processor and modem chip in the Galaxy S6 instead of equivalents from US-based Qualcomm Inc.

Samsung previously relied heavily on Qualcomm chips for its flagship phones, but recent reports based on dismantling Samsung’s handsets showed the firm replaced many Qualcomm chips with its own.

Shin said the companies remain close partners.

“We have to use the best engines to make our products competitive, which is why we opted to use our own chips,” Shin said.

“But we may very well end up using products from Qualcomm again in the next Galaxy phone,” Shin said.

The new Galaxy handsets go on sale in 20 nations today.

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