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Samsung predicts record S6 sales will halt profit slide

 

Samsung said on Thursday it expected its new flagship smartphone to shatter sales records and pull the company out of a recent profit slump that saw it lose ground to arch-rival Apple and cheaper Chinese makers.

The Galaxy S6 is the sixth edition of the South Korean electronics giant’s high-end, signature handset.

Along with its curved-edge variant, the Galaxy S6 Edge, the S6 will hit stores at home and in some 20 countries, including the United States, China and Australia on Friday.

Unveiled in March, the two phones have received rave reviews — fanning hopes of a big comeback for Samsung after the much-criticised Galaxy S5 largely flopped last year.

“Given the response from the market and clients … we expect the S6 to set a sales record for all Galaxy models,” Lee Sang-Chul, the vice head of Samsung’s mobile unit, told reporters.

Samsung rarely discloses handset sales figures but the Galaxy S4 — released in 2013 — is known to have set the firm’s sales record of 70 million units globally.

The firm suffered a dramatic slide in profits last year, hit by slowing demand in an increasingly saturated and competitive smartphone market that it had largely dominated since 2011.

The company struggled to fend off a double challenge from Apple in the high-end market and rising Chinese firms such as Lenovo and Xiaomi in the fast-growing mid and low-end markets.

Samsung hopes the S6 will re-establish it as the clear global smartphone market leader over Apple, which has enjoyed blockbuster sales of its iPhone 6, launched last September.

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Several market trackers had Apple and Samsung tied in global smartphone sales in the fourth quarter of 2014, while at least one suggested Apple had regained the throne it lost to Samsung in 2011.

Signs that Samsung was beginning to turn things around were confirmed Wednesday when it released a better-than-expected profit estimate for the first quarter.

Its forecast of an operating profit of 5.9 trillion won ($5.4 billion) was down 30.5 percent from a year ago, but beat average analyst expectations of around 5.5 trillion won, and was up 11.5 percent from the previous quarter.

The S6 and the Edge — powered by Google’s Android operating platform — feature metal and glass bodies in a break from their plastic-backed predecessors.

The head of the company’s mobile unit J.K. Shin said the complex production process for the curved S6 Edge meant it might be difficult to meet initial demand.

“I think there will be some supply shortage for a while although we’re trying our best,” he said.

Both new handsets allow users to recharge wirelessly by placing them on a charging pad. A 10-minute recharge provides an extra four hours of use.

Users will also be able to make mobile payments in a service similar to the Apple Pay feature available on iPhone 6.

Samsung said the Samsung Pay service would be launched first in South Korea in July.

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by Jung Ha-Won
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