Not many customers were interested to spend $1000 for Samsung’s new flagship device – Galaxy S9. The buyer censure in addition to heavier promotion costs has led to a drop in the unit’s quarterly profit by one-third from the previous year.
The firms plan to provide more infallible features might have resulted in traditional attitude to accept the latest technologies.
The vice president of Samsung’s mobile-communications business, Lee Kyeong-Tae said on Tuesday that the increased price stickers led to consumer refusal. According to Tom Kang, a Seoul-based analyst at Counterpoint Technology Market Research, if consumers cannot afford iPhone X, they would not be able to afford Galaxy S9 either.
Samsung is facing tough competitions from Chinese companies who are providing multi-featured phones at a lesser price and attracting money minded consumers from Europe and India. The mobile industry faced a reduction in shipments for the first time last year and sales are expected to fall this year as well. Huawei reported a sale of 54 million units in this quarter, whereas Apple approximately sold 44 million units. Samsung’s operating profit dipped to 2.67 trillion won ($2.39 billion) and includes its telecom equipment business dropped by 20%. Samsung confronted a global review of overheating Galaxy Note 7 phones, which accounted for a loss of about $6.5 billion and was also banned worldwide from carrying the phone into airplanes as it was considered a fire security danger.
The company would be hoping to turn around issues on Aug. 9, when its lead phone – Galaxy Note 9 will be launched. Mr. Lee emphasized that the Note 9 would be offered at sensible costs and the debut would be supported by all marketing and sales agencies.