For three years in a row, Samsung’s shares have fallen drastically. Sales were going down and the smartphone manufacturer was loosing its hold in the market percent by percent. To counter this, the company has changed its entire game-plan this year. And guess what, it seems to be working.
Ever since their unveiling on March 11, the S7 twins have seen amazing sales. In short, the flagships of the Korean giant are a hit this year. This seems to be the result of the company releasing its devices sooner than normal and pricing them cheaper than expected.
Analysts seem to be increasing their projections for operating profit and revenue when Samsung reports preliminary first-quarter earnings on Thursday. This is the result of the massive estimated sales of the S7 devices that could account for more than 9 million units in the first month. Comparing this with last year’s flagships, we had seen about 3 million units shipped.
The company managed to achieve these digits because of a rewritten playbook. The S7 lineup was released a month before the regular S-series device launch. We also saw many popularly demanded features like a memory-card slot and waterproofing on the new devices.
Adding to the list of positives, the S7 devices cost significantly less than their predecessors. Analysts have predicted that the overall sales of the new phones to be over 9 million, 30 percent more than the previous prediction.
According to many analysts, the demand of the Galaxy S7 devices are much higher than the S6 siblings in the Western countries. Also, Samsung seems to be claiming back its market share in the world’s largest smartphone market, China. Its market share was around 7 percent during the first two months but analysts are hoping for the numbers to boost up significantly because of the new flagships.
Last year, Samsung miscalculated the demand for the curved S6 Edge. This lead to a shortage which in turn affected the company’s revenues significantly. This year, the Korean smartphone manufacturer is more cautious and will, most probably, not have to deal with this problem.
Keeping this in mind, 19 analysts raised their estimates for revenue in the past four weeks, while only 3 lowered theirs. The average projection for sales is 2 percent more than the prior estimates of 48.73 trillion won.
Another card that Samsung has played to win the deck this year is that it has released its flagship phones during a time when the market is vary of competitors.
We expect Samsung’s Galaxy S7 to be the world’s best-selling Android smartphone in 2016,
Neil Mawston, executive director of researcher Strategy Analytics told Bloomberg.
We expect Samsung to release the Note 6 a month or two before the Apple iPhone 7, to try and grab that window of opportunity.