Poor Samsung Galaxy S5 sales blamed for Samsung's gloomy financial outlook
Samsung has warned its investors that the its balance sheet "doesn't look too good". It had previously suggested that profits for fiscal year Q2 would be down year-on-year, but has now taken the unprecedented step in publicly confirming that things might be worse than first imagined.
The confirmation came from Lee Sang-hoon, the company's chief financial officer. And after the public announcement, Samsung's stock fell a further 1.9 per cent on the 8.5 per cent dip already having hit the firm's shares this month.
Some are putting the blame squarely on the shoulders of the Samsung Galaxy S5. Although the company's head of mobile JK Shin announced that it has shipped 11 million units of Samsung's latest flagship smartphone in just a month, many believe that, in the face of stiff competition from HTC, LG and Sony, it has failed to convert those to actual sales over the counter.
READ: Samsung Galaxy S5 review
"It could be that sell-through has failed to live up to expectations, causing a drop in demand for more inventory," claims Electronista.
Korean brokerage firm KTB Investment & Securities also blames weak demand for Samsung's mid-to-low end smartphones in emerging markets, another area in which rivals, such as the now Microsoft-owned Nokia devices division, have excelled in recent times.