Report: Samsung missed Galaxy S5 sales expectations by 40%, looking to relieve JK Shin of duties


Samsung Galaxy S5 DSC05785

The news for Samsung just keeps getting worse and worse. The South Korean company found itself on a bit of a skid in 2014, missing revenue and profit estimates left and right. Much of that was due to a couple of miscues in mobile that led to executive JK Shin getting a hefty pay cut and Samsung making a major change to their production strategy for 2015.

But things may be worse than we originally imagined. According to the Wall Street Journal, Samsung sold just 12 million units of the Samsung Galaxy S5 in its first four months on sale, which is around 4 million units shy of where the Galaxy S4 was within the same time frame. That may sound like a lot by any other company’s standards, but Samsung is the top dog in the smartphone game and they assumed they’d be able to sell a lot more.

samsung logo phan

The company reportedly missed estimates by a whopping 40%, which means they spent a ton of money producing a ton of units that will just sit inside warehouses. The report suggests Samsung missed expectations in all markets aside from the United States, with the biggest drop coming in China — sales were down an alarming 50% in that corner of the globe.

Much has been made about the recent uptick of competition in China, with companies like Xiaomi and Meizu coming to market with impressive devices with equally impressive price tags. Samsung’s name alone might have been enough to help them edge the competition just a couple of short years ago, but this emergence of quality, affordable products seems to be putting a bigger dent in their bottom line than even they may have imagined.

So what else is Samsung looking to do to help overcome these deficits? Well, the same report goes on to suggest that head of mobile JK Shin might be handing his keys over to co-CEO Yoon Boo-keun. The duo were appointed joint CEOs (the former of mobile and the latter of consumer electronics) back in 2013 following pleasing results in their respective areas of business. This move would look to consolidate consumer electronics and mobile into one division, with just a lone CEO overseeing everything.

More than just disappointing performance, though, this shift could spawn from Samsung’s recent surge in the smart home area. With every appliance and TV looking to become “smart” it only makes sense that mobile and consumer electronics become one in the same.

It’s not that the current dual-pronged setup is holding Samsung back (we imagine their divisions all work quite well together as is), but there’s no reason they can’t use this opportunity to adopt a new look as they attempt to climb back atop the mountain they’ve been on all these years.

Quentyn Kennemer
The "Google Phone" sounded too awesome to pass up, so I bought a G1. The rest is history. And yes, I know my name isn't Wilson.

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  1. No surprise. The S5 was absolute crap. The design was horrendrous with that dimpled back, and the features and hardware were way behind the rivals. That being said, i hope Samsung releases a killer S6

    1. I think it is imperative the S6 is awesome. Their mobile piece of the pie and their rep is hinging on it.

  2. Wow. Surprising news. I thought the average Joe and Jane just love Samsung devices.. But then again a lot of people upgraded to the S4 last year and are on 2 yr contracts.

  3. It’s plastic. Plastic is plastic. People want a premium feel to a premium device. Not a leather like backing. Samsung took too long to catch up while others are making metal phones even better. People want clean lines and not busy designs.

    1. Hey now, not all plastics are created equally. Plastic has its benefits and uses even in the smartphone industry.

      Though I am shocked that we still haven’t figured out how to make a tough, durable, impact resistant plastic that feels similar to aluminum. I mean, someone has to be working on that, right?

    2. Yup, plastic is plastic and it’s not what I expect on the rear of a £500 phone.

    3. Don’t knock on plastic just because it’s plastic.

  4. Not surprised, more and more people are buying Chinese phones for almost half the price with equivalent specs. Not only Samsung, but also LG, Sony, HTC will have a hard time selling their phones, especially when the Chinese companies are selling their phones officially overseas.

  5. Step 1 – get rid of Touchwiz and go full android. You can still add bloatware to distinguish
    Step 2 – Get rid of stupid button
    Step 3 – make a decent battery cover

    All 3 of those happen and I’ll be first in line.

    1. As an addendum to part 1, they could leverage the stuff added in the setup phase for Lollipop to have Samsung devices download their Touchwiz launcher and Samsung apps automatically, while allowing them to be completely uninstalled as well. It is a pretty good middle ground between full TouchWiz and stock Android, while allowing people who want one or the other to choose.

      1. I think the uninstall is going to be mandatory soon regardless of who it is. I think I saw an article stating Google is going to require that.

        1. We can only hope. Google has been doing more and more to deal with the ridiculous modifications the OEM’s have done in the past to the core OS, making them unnecessary or simpler to accomplish.

      2. With the AT&T Nexus 6 (and probably the others) you can avoid the Bloatware by going through the initial phone setup without the SIM card inserted. Once you’ve gotten the phone setup wizard completed, shut down and add you SIM and you won’t get the bloat to even begin with.

        1. Quicker to just go through the setup with the sim card in and uninstall the whole 2 apps installed by it.

          Same effect in the end, less time required in doing it.

    2. I agree with you here. I took my GS3 and put CyanogenMod on it. I have a 2014 Moto X Pure now, but gave my GS3 to my son. I’ve always hated the button, but loved the phone after I got rid of their crap software.

    3. Yeah I want TW gone too but most consumers don’t care. Maybe the anticipation of the ip6 hurt sales? But the S5 was released so much earlier that it shouldn’t have mattered that much. Or maybe S4 customers are waiting for the S6?

    4. How predictable. “Remove integral parts of your design language and brand identity; that’s definitely what consumers want!” Phones with physical home buttons dominate the market in case you haven’t noticed. I have never known anyone to base their phone purchase on the characteristics of the back cover.

  6. I have been a galaxy owner or note owner since the epic was released. I finally switched to the htc one. I can’t say that I ever plan on going back. Samsung does make a great product but the competition has finally come up and Samsung did the same thing Apple did. Believe people would buy no matter what. They have been proven wrong and I hope that they do make the s6 amazing and get rid of that stupid dimpled back.

  7. My old S3 is still working great, so there was no need to upgrade to the S4, and when the S5 came along – same thing. But, if the S5 drops significantly in price because there are 4 million units sitting in the warehouse, I’ll probably buy one. Of course, it would need to be the USA version, not the Chinese version ;)

    1. The S3 was a great phone. My best friend and I each bought one together, then she managed to get hers stolen so I picked up a Nexus 4 and gave her my S3 because she loved the phone.

      She is still using it, though she had to replace the batter a while back.

      1. I use my highly modded, hacked, rooted, ROM’d G3 every day. Traveled the world with it. It is starting to show it’s age – but will last until the G6.

        1. She has been on the exact same rom, no updates, for a year and a half now I believe.

          She will probably end up upgrading early next year, though. Poor old thing is starting to slow down. Got our money’s worth out of it though.

    2. Best Buy has the S5 for a dollar with a carrier upgrade.

      1. So if you buy it for $1 on AT&T, you’ll pay a mild $601 for the phone. Not a bad deal I guess.

        1. What are you talking about? The S5 is normally $199 with a carrier upgrade. Best Buy has it for a dollar.

          1. I can’t speak to other carriers… but on AT&T you’ll buy the phone for whatever… $199, $1, $0.01.

            That puts you on a two year contract. The price to access the Mobile Share plan (which you’ll likely be on) is $40/month/device if you are on a contract. That’s $25 more per month than if you were NOT on a contract.

            So, buying the phone will cost you the $0.01 + (24 x $25) = $600.01

            EDIT: I just looked and (surprisingly) $600.01 is still less expensive than retail price. I can’t believe it.

          2. You have to factor in the hidden cost,.. if you were to go with no contract, it would not have been not a penny down: plus you would have been able to pay it off over time. After you have paid for the phone, keep it and save money.

      2. Let me know when Tmob has it on sale.

    3. This is the thing, I believe. People have less reason to upgrade, especially with carriers looking to switch from contract to no-contract plans. It makes more economic sense to treat the phone like a computer and stretch the investment out over a longer period and avoid payments on a new phone.

      1. True, I dropped the contract and saved big. I am happy with the S4 because I’m not having to pay for it any more.

  8. Samsung have been losing the plot since the S2. They really needed to drop the plastic about two years ago or at least have a “premium materials” handset available. They are finally getting around to it, but other manufacturers have beaten them to the punch.

  9. That makes sense. The Galaxy series has pretty much been the same phone over and over. The GS3, 4 and 5 aren’t really any different from each other.

    1. Nailed it. The G5 was just a slightly better G4 which was a little better G3. Go figure it didn’t set any records.

      The G6 now.. well… they better bring it and bring it hard as that is the phone I am waiting for given the “project zero” hype and expectation of an all new phone/design/body and experience.

  10. I think this is a case of reversion to the mean. Other OEMs are finally catching up in terms of marketing and “all around” quality products.

    It’s unfortunate that the S5 is being blamed for this. I know, the aesthetics aren’t there for *some* people. But other than that, if you look at the whole package it’s one of the best out there – and Touchwiz on the S5 is not laggy… it might be ugly in some people’s eyes, but it’s not laggy.


    1. Hi there! Yeah, you. Your caps lock key is broken. You may want to invest in a new keyboard!

  12. S5 wasn’t enough of an upgrade over my S4 for me to consider it, plus the fact it was only available with 16gb, which was short sighted (my S4 was a 32gb version and i wasn’t going to downgrade (regardless of sd cards I can put in). I think that sentiment is echoed in the below feedback too. I went Note 4 instead as that was a much bigger upgrade – screen size, quad hd, s-pen, multi-tasking, faster processor and more.
    Now i just ordered an S5 for my wife (can’t beat $1 at BestBuy this week) to replace her S3 and that will be a big upgrade for her in the speed of the phone and screen quality for starters.
    S6 needs to be a big upgrade for Samsung and it looks like they are doing the right thing – ‘starting from scratch’ with the phone from what I’ve read.
    You can clearly see how a big upgrade/update can become a hit like the iphone moving from 4″ to 4.7 and 5.5″ and some added bells and whistles. S4 to S5 was a tiny incremental update at best…

    1. The battery life in the S5 alone should have been enough of an upgrade for most people. But alas, it wasn’t.

  13. Finally. I thought people were turning into Samsheep not recognising that other companies build so much better phones. Currently I’d still go with the OnePlus One over anything.

    1. We DGAF really.

    2. Only for cost maybe, I’d still take the gs5 over OnePlus they are too new to know how to run a business, they were afraid o not make a profit so they offered the phone on a invite/pre-order basis for the life of the phone there still is no actual “release” date because you have to pre-order. Their selling model was worse than anything else then released a shady product.

  14. What I’m getting from the I hate the plastic comments is nobody uses a case anymore? Because most of the iphones that have these so called premium materials seem to be locked up in an otterbox. Doesn’t make sense to be worried about what it looks like if you have it in a case and can’t see it.

  15. Im glad Samsung is getting punched in the face for this, means they will take competition seriously from now on.
    Ppl talking about touchwiz or plastic being the reason why Samsung sales have suffered are dummies. Its mainly because of increased competition. Chinese manufacturers are the major reason why. Also, companies like LG who nobody cared about a couple of years ago are relevant now so they start being successful which means they are taking customers away from someone else.
    The S6 needs to be flawless otherwise Samsung is in major trouble. It needs to have excellent hardware, excellent software and be unique where ppl will wanna buy it cause it has something other devices don’t.

  16. Everyone buying iPhone 6’s.

  17. Quit being like apple about it release great hardware and software redesign touchwiz around android 5.0

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