Samsung is having an awful year on mobile, even though the South Korean company still holds first place in overall sales, the gap is closing. One of the major devices of 2014, the Galaxy S5, may be the main reason behind the drop in sales. According to a report from The Wall Street Journal, Samsung missed the sales target by 40 percent for the flagship device.
Estimations were high going into the first quarter of 2014 for Samsung. The Galaxy S4 — while questionable from an innovative standpoint — performed exceptionally well in sales over 2013. This lead to the Galaxy S5 and what seems like an overestimation on Samsung’s part. The Galaxy S5 did not offer enough and the smartphone industry became a lot more competitive in multiple regions over the course of one year.
Xiaomi had already shown growth in China and this has been reflected on Galaxy S5 sales in the country, almost 50 percent lower than the previous Galaxy S4. Samsung has been booted out on both the high-end and low-end of smartphone sales in China. In the U.S., the Galaxy S5 surprisingly gained more sales, but it was not enough to spur an advancement in the product line. The Galaxy S5 managed to only produce 12 million sales in the first three months, and sales have been stale ever since.
Warehouse inventory started to pile up around the time Samsung stopped advertising the Galaxy S5 heavily, leading to heavy costs for the South Korean manufacturer. Samsung had to sell the Galaxy S5 units at small profit, in order to get the units out of the warehouses.
It looks like this mistake will not be repeated. Samsung has shown throughout 2014 a dedication to metal and premium design, alongside a new revamp in the management to make Samsung even more competitive against Apple and other Android rivals.