Samsung’s new Galaxy S5 should outsell its predecessor and defy predictions that the South Korean titan’s latest model will struggle in a tough market for high-end handsets, a top executive said.
The world’s biggest smartphone maker has slashed prices of the S5, which rolled out globally on Friday, offered a gift pack worth $600, and more than doubled the number of initial launching countries to 125 in a bid to sustain growth in the mobile business, which generates 70 percent of its total profit.
A smooth launch is crucial for Samsung, which reported its second straight quarter of profit decline earlier this month as margins in the key smartphone business come under growing pressure from cheaper Chinese rivals. “(The S5) is selling faster than the S4 so far, though it’s difficult to share specific numbers as we’re still at early stages,” Yoon Han-kil, senior vice president of Samsung’s product strategy team, told Reuters in an interview. “S5 sales should be much better than the S4.”
Though Samsung did not offer any sales target for the S5, the company sold more than 10 million S4s in the first month of the phone’s launch. Yoon said the S5 should do significantly better than this. Initial sales are important to gauge the longer-term chances of success for a product which represents a shift in approach by Samsung.
Until now, Samsung phones have been known for hardware innovations like the S4′s full high-definition screen, while their software was seen as gimmicky compared to the more useful applications on rival Apple Inc devices. With the S5, however, Samsung has offered few if any hardware revelations. Instead, its focus has been on key enhancements such as water-resistance, a better camera and “ultra power-savings mode” which automatically turns off unnecessary apps when the battery runs low.
“With the S4, we thought smartphones shouldn’t just focus on hardware. They also had to come with a lot of software and services, and that line of thinking did lead us to cram many services into the device,” Yoon said. “We still feel the same way but this time around, we decided not to put in so many things and only include what the user really needs, so I cut out a lot of services and software,” the senior vice president said.
For example, he said the S5 was shipped to carriers with 40 apps installed as opposed to more than 50 in the previous models.