Galaxy S6 Can't Help Samsung's Q2 Universe of Hurt

Samsung Electronics’ flagship Galaxy S6 smartphone saw flagging sales for the second quarter of 2015, sending profit tumbling 8 percent from a year earlier, to reach $4.9 billion.

The company’s mobile unit—once its main economic engine along with televisions—is feeling the heat from low-cost rivals from China and India, which are dominating in the midrange and economy-priced smartphone arenas. That has cost the Korean giant dearly: The mobile division's operating profit plummeted 37.6 percent year-over-year thanks to price cuts to compete. The average unit price dropped by more than 10 percent to below $300 in the latest quarter.

Worse though is the fact that operating profit margin came in at 10.6 percent—which is flat sequentially but down sharply from 15.5 percent a year ago. That’s worrisome considering that the company released the much-talked-about upper-end Galaxy S6 Android handset, along with a nifty curved-screen version that reviewers and analysts loved, called the Galaxy S6 Edge.

The populace however did not flock to the more conventional Galaxy S6 as anticipated, leaving Samsung with unsold inventory; meanwhile, it didn’t make enough of the S6 Edge, which led to shortages there.

The results mark the fifth straight quarter of losses for Samsung, with no end in sight. In an effort to stem the pain, it has moved up the launch of its smartphone-tablet hybrid device, the Galaxy Note 5, from the holiday season to the third quarter. It will launch August 13.

The bright spots for Samsung were memory chips, application processors and display panel. Most notably, semiconductor income surged by 83 percent from a year earlier, accounting for 49 percent of overall profit in the second quarter, ahead of the mobile division's 40 percent contribution.