Samsung says the Galaxy S9 isn’t selling very well

Photo by Amelia Holowaty Krales / The Verge

Samsung Electronics’ quarterly earnings are in, and as ever they’re right in line with guidance, meaning that the company’s run of record profits is at an end. Samsung made an operating profit of 14.87 trillion won ($13.3 billion) on sales of 58.4 trillion won ($52.1 billion); revenue was down 4 percent year on year.

According to Samsung, the drop in revenue can be put down to “softer sales of smartphones and display panels.” The company’s most important phone of the year, the Galaxy S9, went on sale at the end of the previous quarter, but Samsung describes its performance as “slow.” Earlier this month analysts predicted that it would be the worst-selling Galaxy S flagship phone since 2012’s Galaxy S3.

Samsung’s display business also had a rough quarter, with “weak demand” for flexible OLED panels as seen in products like the iPhone X, and LCD shipments falling in both price and quantity. The company does expect OLED demand to pick up in the second half of the year, and Apple’s reported plan to launch two new OLED iPhone models will likely help with that.

Bright spots include the TV division’s strong sales of premium models thanks to the World Cup, while Samsung’s major profit driver remains its semiconductor division — demand for NAND flash memory and DRAM chips isn’t going away any time soon. Samsung also says its image sensor business is growing due to Chinese companies using the chips in dual-camera smartphones.

Comments

lol maybe because people are still on there 2 year contract with GS8

Huh? What about all the people with the GS7, 6, or older? Or some other non-Samsung phone? It isn’t just the people who bought phones last year who are potential customers.

Not to mention the fact that two-year contracts are essentially dead.

Maybe in North America but think about it. There are countless other markets with different mechanisms of getting to the consumer. Just saying.

The rest of the world moved on from 2-year contracts with ‘subsidy’ years ago.

Even when people finance their devices though, a lot of the time it’s a 24 month financing period so it’s similar to a contract. No carrier in the U.S. offers the traditional 2 year contract to new customers but most people still keep their device for 2+ years before changing it.

Sure, but it’s not like that two year clock started for everyone the day the S8 came out and that’s why people aren’t buying the S9. That’s my point. New people are in the market for a new phone every day. 2 year contracts, or the upgrade cycle in general, can’t explain why the S9 isn’t selling while other phones are.

Yea but the difference is with the financing, there are also a ton more "upgrade after a year with trade in" deals too.

You seem to think I have a US-centric worldview. I don’t. 2-year contracts are no longer the norm in most markets around the world. They certainly can’t explain why people aren’t buying the S9.

No it doesn’t. Sim only is the most popular contract in the UK it accounts for over 30% of the market and is expanding. There are also 18 month, 12 month, 1 month phone deals as well as pay as you go sims.

In America 2 year deals until a few years ago were almost the only way to get a phone.

There are also plenty of 36 month contracts now, especially for the more expensive phones. Virgin – £28 a month for an iPhone X. 36 months. That deal may be current customers only, as the public site says £36 I think. But still.

Could be a testament to the quality of the S7 and S8 though.

Could be a testament to the lack of change between the S8 and S9. Why spend a few hundred more on incremental changes when you can just get an S8?

You could say that about any iPhone S.

You could say that, if you only look at the form factor. The "S" line traditionally got the bulk of the significant tech upgrades, while the numbered line got the cosmetic changes.
I understand the two year upgrade cycle, but it doesn’t account for the drop.
At the same time, buying an old phone also makes little sense. They will show performance issues sooner and therefore not last as a long, erasing the initial cost savings over the long haul.

I dunno, maybe people are waiting for the S10.

Exactly. The S8 is still fantastic. And it’s on sale. Android shoppers are thrifty. You can get high end performance without breaking the bank.

They bought the GS8 because it probably was a much cheaper choice and looked and performed the same as GS9.

Exactly. The S8 was too good and they kept it around at a lower price. That was a no brainer.

It’s not exactly good news if sales of their older and cheaper phone cannibalized their newest flagship’s sales though.

Regardless of contract status, computing hardware has never aged better than in recent times. I’m still using 2016 hardware as daily drivers and have almost zero FOMO.

That’s awesome. I haven’t kept a phone more than a year since 2012. Can’t stand not having the latest.

what’s FOMO?

fear of missing out

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