Last month we posted a report titled "Samsung Confirms Crashing Galaxy S6 Sales Hurt Q2 Financials with Poor Q3 Profit Forecast Duly Noted." As far back as May we reported that the Galaxy S6 looked like a loser and in fact a disaster. The S6 was to be Samsung's smartphone turnaround story coming off a disastrous run with their S5 model that was a nightmare. Today the mainstream press finally acknowledges that Samsung's smartphone glory days may be behind them.
Reuters is reporting today that "For four years Samsung Electronics Co Ltd has basked in the success of its Galaxy smartphones, making billions of dollars competing with Apple Inc in the premium mobile market.
The coming years are set to be more somber for the South Korean tech giant, as it is forced to slash prices and accept lower margins at its mobile division in order to see off competition from rivals including China's Huawei and Xiaomi in the mid-to-low end of the market.
Behind Samsung's reality-check is the fact it is stuck with the same Android operating system used by its low-cost competitors, who are producing increasingly-capable phones of their own."
Ben Thompson, an analyst at Stratechery.com in Taipei noted for the report that "The writing has long been on the wall for any premium Android maker: as soon as low end hardware became 'good enough,' there would be no reason to buy a premium brand." Well, except for Apple's iPhone-6 mania that's still rocking the globe.
Margins at Samsung's mobile division fell to 10.6 percent from 15.5 percent a year earlier during the second quarter of 2015, despite the April launch of its critically acclaimed Galaxy S6 range.
It remains the world's biggest smartphone maker – in volume – but it is Apple that is reaping most of the rewards – the highest profits. For more on this story read the full story here. Are Samsung's smartphone glory days really behind them or is this just a sustained lull? Only time will tell.