Samsung will most likely report its second consecutive quarter of profit decline as its high-end smartphone business "loses steam," according to Reuters.
The biggest smartphone maker in the world is hoping that its Galaxy S5 smartphone, set to go on sale globally this week, will help increase sales, but most analyst aren't sure what to expect from the new phone.
Samsung's new Galaxy has gotten off to a slow start so far after debuting in South Korea, which could be a bad sign for the company, according to Reuters. The slow start has been attributed to a temporary ban on mobile carriers selling handsets and criticism by Samsung fans and analysts alike over the lack of "eye-catching" new features.
Samsung priced the S5 approximately 10 percent cheaper than its S4 device, despite the fact that its main rival, Apple, is not expected to release an updated iPhone until the fall.
The firm also dialed back on marketing for the new S5 device as well.
"This strategy gives them price competitiveness that can be leveraged to drive sales volume and defend overall profits," IM Investment analyst Lee Min-hee said, according to Reuters. "The Galaxy S5 isn't something that will awe investors, and that's mostly the same with high-end phones at this point. Smartphones no longer offer much groundbreaking innovation and are equalizing to a certain degree."
The Samsung Galaxy S5 was unveiled at MWC 2014.
JK Shin, co-chief executive and head of Samsung's mobile business, has been quoted saying the company is taking a "back-to-basics" strategy that it hopes will help them increase revenue, according to Reuters.
"The S5's boost to Samsung's bottom line will be weaker than the S4, as it will have fewer shipments in the crucial early launch period and then sales will taper off gradually," said Seo Won-seok, an analyst at Korea Investment and Securities, according to Reuters.
"To offset that, Samsung is likely to focus more on cheaper models and broadening lineups," Won-seok added.
Seo said he believes the Galaxy S and Note series' share of Samsung's total mobile profits will likely drop to approximately 59 percent this year, from almost three quarters during the same time in 2013.
Its mobile division accounted for around 68 percent of Samsung's operating profit in 2013.
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