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Samsung Phone Sales Squeezed High and Low, Study Says
Samsung Phone Sales Squeezed High and Low, Study Says
By Dan Heilman / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JULY
16
2014

How bad is it getting for Samsung Electronics' smartphone division? A new research report found that the company's flagship smartphone, the Galaxy S5, is lagging in sales behind Apple's iPhone 5s -- and the next-generation iPhone 6 hasn't even been released yet.

Korean research firm Counterpoint released a survey of 35 markets, accounting for nearly 90 percent of global sales, earlier this week. The report found that sales for the 8-month-old iPhone 5s stood at 7 million in May, compared with about 5 million for Samsung's flagship Galaxy S5.

High-end phones made by Apple aren't the only competition Samsung is concerned about. The company was also crowded out of two spots in Counterpoint's top 10 sellers by phones made by Chinese company Xiaomi, whose products are known for being made and sold cheaply.

"This is a worldwide problem for Samsung," said Counterpoint Research Director Peter Richardson, whom we reached via Skype in Berkshire, England. "Their range is broad and deep, but they haven't looked after their midrange line, which is getting a little long in the tooth by now."

Market Share Crumbling

Data from another research firm, Canalys, recently showed that Samsung's market share in the first quarter of 2014 fell to 18 percent from 20 percent a year earlier. Its data also showed gains on the part of lower-end smartphone manufacturers such as Xiaomi and Lenovo Group.

One mitigating factor in the Counterpoint study is that the Galaxy S5 was in only its second full month of sales at the time of the survey. Another is that Samsung's S4 and Note 3 smartphones rounded out Counterpoint's top five sellers. Also, Counterpoint's data measure retail sales to consumers. Most industry sales studies look at manufacturer shipments instead.

But none of that is much consolation to Samsung, which last week gave second-quarter earnings guidance that was much weaker than expected. The company is on track for its worst quarterly profit in two years.

Counterpoint's study said the Galaxy S5 appeared to be doing worse than the Galaxy S4 had done in its initial launch against the iPhone 5.

Appearance Problem

Top sellers six through 10 in Counterpoint's sales survey were the Apple iPhone 5c, its iPhone 4s, Xiaomi's MI3, Samsung's Galaxy S4 Mini, Xiaomi's Hongmi Redrice, and Samsung's Galaxy Grand 2. Among the phones outside of the top 10 included Sony's Xperia Z1, Motorola's Moto G, Huawei's Honor 3C and LG's G2.

Galaxy S5 sales probably remained at 5 million units in June, according to Counterpoint.

"The S3 and S4 were perfectly competent products but the design was disappointing," analyst Richardson said. "People found them plasticky, and not at all like a high-end product. They had a chance to address that with the S5, but it's hard to tell it apart from the S4."

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