Malcolm Owen
Samsung's latest flagship smartphone, the Galaxy S9, may be underperforming compared to the previous model, with a report on South Korean sales and an analyst's pre-order note suggesting the main rival to Apple's iPhone's launch is lower than the electronics giant anticipated.
Arthur Wood Research analyst Jeff Johnson's note to investors seen by AppleInsider suggests the pre-orders for the Galaxy S9 are down approximately 50 percent compared to those of the Galaxy S8. Johnson writes the pre-orders are "significantly underperforming pre-launch expectations of 10 percent to 15 percent growth."
South Korea, Samsung's home country, is also seemingly disinterested in the Galaxy S9, with Yonhap News sources also report that the first-day sales performance in the country was around 70 percent that of the S8. While the Galaxy S8 is said to have racked up 260,000 pre-orders last year, only 180,000 units of the S9 appear to have been pre-ordered this year.
Johnson suggests the lower orders is a sign of customers "upgrading [at] a much slower pace as features are falling on deaf ears." The analyst suggests "smartphone sales are starting to decline at an accelerating rate," impacting not only Samsung's flagship mobile device, but the industry as a whole.
Calling it a problematic trend, Johnson believes this could be an issue for companies like Apple and legacy component producers in smartphone supply chains, identifying Broadcom, Qualcomm, Cirrus Logic, and Skyworks Solutions as potential victims.
"We think AAPL supply chain investors are already on edge given what's been reported thus far," Johnson writes, "but we fear that smartphone demand over the next couple of quarters is poised to disappoint." The analyst predicts this will cause carriers to produce "more aggressive promotions" in order to shift excess inventory.
More data on the Galaxy S9 order situation is expected over the next week.
The Galaxy S9 received mixed reviews from critics this week, with a similar design to its predecessor and underwhelming new features overshadowing the specification improvements.
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34 Comments
I really think this is a Samsung issue, this is what happens when all you can do is copy, and when you fail to copy, people are not interested in your product.
I don't see anything (yet) that would point to any specific anti-Samsung shift to account for a drop in sales. With the smartphone market being mature it's going to occur. When it's happened with Apple I also didn't think it was a nail in the coffin for their business, either. It happens.
There will be a point (and it doesn't matter if it's Android or Apple) that people are going to get tired of shelling out close to $1000 for a phone that is only marginally better than the one they have now. Before, there were deals and trade-in offers by the carriers that allowed people to get a phone for half price or even free, but now the deals are terrible. Every thing is "with trade in" and they give you a crappy value for your flagship phone, and then make you wait 24 months to get all your trade-in value. It will happen with Apple sooner or later when they just start making minor changes and people keep what they have (ie., the iPhone 8).
The difference is that the iPhone X was a paradigm leap forward, hence it being the world’s best selling smartphone last quarter, and doubling market share in South Korea at Samsung’s expense, and the S9 is just like an ... S8. Apple have 51% of the market by revenues on only 17% market share globally. Their ASP is triple Samsung’s because their phones are that much better. And you know what? People who love their phones - ie. the 20% of the smartphone market that really care about the product and have a tactile relationship with it and the brand will carry on buying $1000-1400 phones because they can get them on contract paying little more on a monthly basis over two years than their old-gen iPhone. Samsung? They don’t innovate. They have no differentiating features. They have no excitement. Worst for them, they have no control over the software, or the chipset which is chiefly just generic snapdragon processors and other controllers bolted together to try and work as best it can with a Frankenstein version of android. Samsung have blown it spectacularly. Apple are even moving OLED production to LG and CPUs to TSMC. Orders for the S9 are 50% lower than Samsung expected because it’s late, it’s boring, it’s expensive, and compared to an iPhone X which is truly innovative and fresh, looks like last year’s pro, queen looking for attention while wearing a new but badly fitted dress. 2018 will be noted as the year Android OS forked, google produced their own proprietary version vertically integrated with their own hardware (which unlike Apple they don’t have the expertise to design and pull off) and the fracturing of the Android army. It’s toast. The Technology in the iPhone X is at least two years ahead of anything else. While Samsung wails about the S9 Apple are gearing up to launch three new top end phones and possible a new low end model too. You know that OLED production cut Samsung we’re blaming Apple for? A) part of the reason was due to Apple moving to LG and b) the other SA sad pathetic reason is Samsung overproduced OLED panels for their own phones and expecting other manufacturers to follow suit. Well, they didn’t, and Samsung’s sales are only 50% of the target, yet they blame Apple for their underperformance. Odd that that smartphone selling the most units in the entire world - the iPhone X - breaking all records for units and price and ASPs should somehow be a failure? Erm, maybe Samsung just totally screwed up and lost a shit load of money on bad manufacturing forecasts and producing a lousy next gen phone which was more like your last year’s phone. Apple jumping for, 16% to 29% of the market in South Korea with their new highest-value phones, and Samsung losing 9% to 51% of the market across their entire product range, in their home market, tells you all you need to know.. South Korea is bored of Samsung devices and wants iPhones. The writing is on the wall. Android was a nice idea but it’s broken and like Humpty Dumpty won’t ever be quite put back together again.