In the sales figure game played out between Samsung’s Galaxy S flagship and Apple’s new generation iPhone, Samsung traditionally outperforms in the second quarter of the year, when their flagship is released. Apple run away with sales in the fourth quarter as their device has been released at this time since 2011. This leaves the first and third quarters as battlegrounds. Later this week, Samsung is releasing their second quarter sales and business information and the market are expecting strong sales figures of the Galaxy S7. However, this year, investors are expecting a turnaround after the last few years of disappointing sales and falling earnings. Analysts are expecting that strong sales of the Galaxy S7 range will have boosted operating profit and it could be around 13% higher than Q2 2015.
To put things into perspective, 2016 was always going to be an interesting year for Samsung. In 2015, Samsung reinvented their flagship smartphone range with the Galaxy S6. The Galaxy S6 came with a new metal and glass design but dropped two of Samsung’s “always had” offerings: it lacked a replaceable battery and a MicroSD slot. The Galaxy S6 also dropped the water proofing that the 2014 flagship Galaxy S5 included. For 2016, Samsung’s follow up device, the Galaxy S7, is still missing the replaceable battery but comes with a MicroSD card slot and water resistance plus the metal and glass build and design. Samsung also release the Galaxy S7 at the end of the first quarter so as to capture the full effect of those sales in the second quarter of 2016. The Galaxy S7 has been well received with some industry experts predicting Samsung sold 16 million devices. Furthermore, the higher priced Galaxy S7 Edge has outsold the smaller Galaxy S7, which is good news for the business as the Galaxy S7 Edge has a higher profit margin for the business.
However, there are other reasons why Samsung should be performing strongly. Samsung’s semiconductor businesses are still performing well: Samsung’s Exynos chipsets are in demand and the business has seen price recovery in the DRAM module and high capacity 3D NAND chip markets. For 2015, these business divisions were instrumental in Samsung’s overall profit. And a survey of 16 investment analysts puts Samsung’s second quarter profit at 7.8 trillion won, the highest quarter since the first quarter of 2014 (which showed 8.5 trillion won). The company will reveal Q2 data this coming Thursday.