Despite becoming the undisputed leader of mobile phone and especially the smart phone industry, Samsung has not been able to reverse its declining profit returns. It was obvious that they have committed strategic mistake somewhere along the path to success.
Strangely enough it turned out that super popularity of one of their flagship model; the Samsung Galaxy S6 Edge has caused the decline in the sales of other models in the smart phone industry.
For some times the top executives in the company could not understand what was happening to them. But gradually it dawned on them that the super popularity of Samsung Galaxy S6 Edge followed by the Samsung Galaxy S6 has caused the chaos. Many of their older phones like Samsung Galaxy Note 3 and Note 4; Samsung Galaxy S3, Samsung Galaxy A series phones and Premier all registered declining sales as buyers mostly opted for the flagship phones Galaxy S6 Edge and S6.
According to the company’s own estimates the decline in profits from various mobile phone sales could go as high as 4% in comparison to the last year’s profit for the Korean tech giant.
One of the major reasons for such downside for Samsung and a couple of other top smart phone companies is the stiff competition they are facing from the smaller and lesser known companies. These companies are bringing out cheaper versions of smart phones with many of the features offered by leading smart phones though in terms of durability and smartness they would always be second to Samsung.
There were two reasons for such scenario. In many parts of the world like the UK market the Galaxy S6 Edge was short in supply in comparison to demand. But in case of some other smart phones marketed b Samsung the supply is more in comparison to demands. In result, the overall position indicates a loss for the big company.