Samsung Electronics, the world’s largest smartphone maker by sales, expects its latest handset to sell more than 10m units by July, making it the company’s biggest hit so far.
The South Korean company said its earnings from the mobile phone division would improve in the second quarter on the previous three months, as the Galaxy S III smartphone had been well received by customers since its global launch in late May, beating Apple’s new model to market.
“We are getting far better feedback on the model overseas than what we experienced with the Galaxy S I and II, “Shin Jong-kyun, head of Samsung’s mobile division, told reporters at the phone’s domestic launching event. Samsung sold more than 50m units of the previous two Galaxy S models globally in the past two years.
The latest model of Samsung’s flagship smartphone went on sale in 28 countries in Europe on May 29 with the company planning to introduce the product into 147 countries through 302 operators by July. Samsung rolled out the model in the US last Thursday.
Shin forecast domestic monthly sales of the Galaxy S III to top 1m units while it would sell more than 10m overseas by July. “Our production has fallen short of demand so far but supply conditions will improve around next week,” he said.
Shin said Samsung was looking into a complaint from a Galaxy S III owner in Ireland that the phone overheated and burnt its lower end. But he added that an initial investigation indicated that the damage was not caused by a battery explosion.
Analysts said Samsung was on track to meet sales forecast as its smartphone momentum was expected to continue on the back of the Galaxy S III until Apple launches its new iPhone 5, probably in the autumn.
“Samsung is enjoying strong sales of the Galaxy S III as it is the only new model in the high-end smartphone segment. But competition will intensify once Apple launches the iPhone 5,” said Greg Roh, analyst at HMC Investment & Securities.
Despite the company’s bullish forecast, Samsung’s shares fell more than 4 per cent on heavy foreign selling to close at Won1.13m on Monday amid concerns about its earnings outlook.
Roh expected Samsung’s earnings to peak in the third quarter as the launch of the iPhone 5 will hit subsequent profits. Analysts have cut their second-quarter profit forecasts for Samsung, citing global economic uncertainties and the slow recovery in chip prices.
Taurus Investment & Securities cut its operating profit forecast for Samsung to Won6.92tn from Won7.16tn previously. Samsung is expected to present its guidance for second-quarter earnings next week.