Samsung-Galaxy-S5

The Galaxy S5 a disgrace to Samsung

Turns out that the Samsung Galaxy S5 isn’t what Samsung thought it to be. According to a report by The Wall Street Journal, the company’s 2014 flagship has performed way below expectations selling only 12 million units in the first 3 months. That is roughly 4 million lesser than the Galaxy S4. The report claims that several of the Galaxy S5 smartphones have piled up in warehouses across the globe with increased marketing efforts failing to offload these units.

With the Galaxy S5 selling 40 percent lower than Samsung had projected, the company is said to be planning a major management shakeup to rejuvenate the mobile division. According to the report, Samsung’s planned reshuffle in the top management will see the head of Consumer Electronics (TVs and appliances) taking over the mobile division. Boo-keun Yoon, a co-CEO who heads the consumer electronics section will possibly take over from the mobile chief co-CEO JK Shin who is expected to cede his role in the mobile sector after the disastrous year.

Samsung’s market share has continued to decrease as reported by research company IDC, showing the Android smartphone maker with a 23.8 percent market share in the third quarter, which is down from 32.5 percent one year ago. In China, new comers like Xiaomi are making a killing with the low-cost yet high-spec smartphones like the Mi4. However, Samsung failed to influence the buyers to get a Galaxy S5 which led to sales being over 50 percent down in the country. Despite the slump, Samsung’s market share is said to have grown in the United States, currently it’s major market.

Over-estimations on the demand of the Galaxy S5 led to several units produced and increased advertising spend to get rid of the units that are said to be piling up in the warehouses. These major challenges saw the company report a 49 percent drop in profits and revenue yet again in the third quarter.

Lee Kun-hee, Samsung’s Chairman and the man who was behind the rise of the technology giant in the 1990s and beyond is currently very ill. He suffered a heart attack in May. His son Jay Y. Lee is being considered as the successor even though the company has not reveled any succession plan.