Samsung redesigned its flagship smartphone from the ground up for the first half of 2015. The Galaxy S6 is the fastest and most powerful handset the world has ever seen, and its stunning 2K display has been called the best on the planet. Samsung then took things a step further by using premium aluminum and glass construction to make the S6 the most sleek and solid smartphone the company had ever produced.
But it wasn’t enough.
Samsung reported its audited second-quarter results on Thursday morning, and the company’s operating profit from its mobile division plummeted 38%. Put plainly, the Galaxy S6 simply couldn’t get the job done when pitted against the iPhone 6.
Curiously, Samsung blamed its poor performance in the second quarter in part on the Galaxy S6 edge. The company said it couldn’t build them fast enough to meet strong demand. At the same time, however, Samsung said it will soon slash prices on the Galaxy S6 and S6 edge in an effort to “maintain” its sales momentum.
Samsung’s Q2 hurt by Galaxy S6 “supply shortage”… but company is about to slash prices on S6. K.
— Zach Epstein (@zacharye) July 30, 2015
On its own June-quarter earnings call, Apple CEO Tim Cook said much of the success the iPhone 6 and iPhone 6 Plus are enjoying is coming at the expense of Android vendors. The new iPhones are attracting more platform switchers than ever, which obviously makes sense. Pent-up demand for iPhones with larger screens has driven record iPhone sales in each of the three quarters Apple has reported since launching the phones.
Now that Samsung’s audited numbers are out, it’s safe to say that the company has been impacted dramatically by this new rush of Android defectors switching camps and buying iPhones. Aside from the steep tumble in operating profit, Samsung’s mobile revenue fell 7.3% to 25.5 trillion won.
Meanwhile, Apple announced record iPhone unit sales for the June quarter, up 35% on-year to 47.5 million units. The Galaxy S6 is the best Android phone in the world, but even the best isn’t good enough when you’re up against the iPhone 6.
Samsung is about to unveil a brand new flagship phablet in about two weeks, and its strategy with the new phone is expected to be in line with the Galaxy S6. The Galaxy Note 5 will be more powerful than its predecessor, and it will feature a better display with a glass casing instead of plastic.
Then, a month later, Apple will launch its next-generation iPhone 6s and iPhone 6s Plus.