Samsung has missed expectations for its quarterly earnings guidance, which is bad news since those expectations were already pretty low. The slowing growth of the smartphone market dominator is being attributed to lackluster Galaxy S4 sales. Samsung’s premiere handset has reportedly sold 20 million units since its launch, according to a recent report from Yonhap News, however.
Overall, the picture is of a briskly selling phone (faster than the previous generation) that’s nonetheless not growing Samsung’s smartphone sales at the rate analysts and investors were hoping. Samsung may be able to rectify this by throwing a whole bunch of new devices at the problem, including the S4 Active, that fall under the S4 brand and therefore inflate the number of sales for the flagship, but it’s still an issue that Samsung’s Galaxy S4 isn’t selling at the pace of either the iPhone 5 or the iPhone 4S when those devices first debuted.
Samsung didn’t do poorly by any standards that normal people would respect: its profits were up to a record $8.3 billion, for instance. But stock price tumbled on the miss of expectations, and fears there’s no longer anywhere to go higher in terms of the global smartphone market. Fears the global market is reaching a saturation point aren’t limited to Samsung; Apple CEO Tim Cook has been discussing the iPhone’s growth potential in recent talks, a subject which wouldn’t come up unless there were worries that wasn’t the case.
Still, the less-than-staggering Galaxy S4 numbers give Apple a big chance to impress in the fall, and for Cook and company to show investors, analysts and company watchers that there is indeed room for continued growth in the smartphone market.
There are challenges inherent in accomplishing that, however; the iPhone coming in the fall is likely an iPhone 5S device, which would be only a slight hardware improvement over the iPhone 5, and not a complete redesign. That could fail to convince some to upgrade. But there’s also the possibility Apple will debut a low-cost version of the iPhone, which could greatly enhance iPhone total sales numbers for the period. Word is this won’t be bargain-basement priced, but as the first addition to the iPhone line that is made concurrent with the flagship model, it’s sure to attract a lot of attention if it ships.
The industry is looking at Samsung and Apple for indication of the health of the global smartphone market, and they’ve found Samsung lacking this time around. That puts a lot of pressure on Apple to perform come fall, but with a newly redesigned mobile OS and a potentially dramatic change to the iPhone product line, Cupertino could be up to the challenge.