Report: Samsung missed Galaxy S5 sales expectations by 40%, looking to relieve JK Shin of duties
The news for Samsung just keeps getting worse and worse. The South Korean company found itself on a bit of a skid in 2014, missing revenue and profit estimates left and right. Much of that was due to a couple of miscues in mobile that led to executive JK Shin getting a hefty pay cut and Samsung making a major change to their production strategy for 2015.
But things may be worse than we originally imagined. According to the Wall Street Journal, Samsung sold just 12 million units of the Samsung Galaxy S5 in its first four months on sale, which is around 4 million units shy of where the Galaxy S4 was within the same time frame. That may sound like a lot by any other company’s standards, but Samsung is the top dog in the smartphone game and they assumed they’d be able to sell a lot more.
The company reportedly missed estimates by a whopping 40%, which means they spent a ton of money producing a ton of units that will just sit inside warehouses. The report suggests Samsung missed expectations in all markets aside from the United States, with the biggest drop coming in China — sales were down an alarming 50% in that corner of the globe.
Much has been made about the recent uptick of competition in China, with companies like Xiaomi and Meizu coming to market with impressive devices with equally impressive price tags. Samsung’s name alone might have been enough to help them edge the competition just a couple of short years ago, but this emergence of quality, affordable products seems to be putting a bigger dent in their bottom line than even they may have imagined.
So what else is Samsung looking to do to help overcome these deficits? Well, the same report goes on to suggest that head of mobile JK Shin might be handing his keys over to co-CEO Yoon Boo-keun. The duo were appointed joint CEOs (the former of mobile and the latter of consumer electronics) back in 2013 following pleasing results in their respective areas of business. This move would look to consolidate consumer electronics and mobile into one division, with just a lone CEO overseeing everything.
More than just disappointing performance, though, this shift could spawn from Samsung’s recent surge in the smart home area. With every appliance and TV looking to become “smart” it only makes sense that mobile and consumer electronics become one in the same.
It’s not that the current dual-pronged setup is holding Samsung back (we imagine their divisions all work quite well together as is), but there’s no reason they can’t use this opportunity to adopt a new look as they attempt to climb back atop the mountain they’ve been on all these years.