Samsung to Kill Off 30 Percent of Their Devices as Older Models Fail to Clear Shelves

You won’t be getting your favorite Samsung smartphone next year. Probably something you wouldn’t want to tell the hardcore Samsung fanatic, but is never the less true.

And this has all been triggered by the continued drop in sales of mostly its older model devices which have continued to pile up in their warehouses this year leading to the highest drop in profits in two years. However this is not the only reason for the drop in profits, because of the drop in demand of their phones, Samsung have said that they were forced to spend more on marketing to compensate.

Hence the drop in profits at the end of the year did not come as a surprise to the smartphone maker as earlier this year it announced it expected around 24 percent less this quarter than it did a year ago, with underlying sales down by an estimated 8-11 percent.

In its second quarter, Samsung posted profit of 6.25 trillion won ($6.1 billion), down from 7.77 trillion won ($6.96 billion) last year, its lowest quarterly profit in two years.

Low and mid-range Samsung smartphones have also been facing a lot of competition in Europe from phone maker Motorola, while closer to home Tecno remain their biggest competition in these segments.

And on high-end segment, Apple are their biggest competition with the introduction of the iPhone 6, meanwhile in China (one of the biggest smartphone markets in the world), buyers have been going for 4G phones and the sales of their 7 and 8 inch tablets has also been affected by the introduction of large 5 and 6 inch phablets this year.

Samsung however expected that the introduction of the Galaxy Note 4 would increase sales in the last quarter of the year but would still have a tough time especially with the continued drop in the average cost of smartphones.

The company’s strategy now is to reduce the number of devices it makes by around 25 to 30 percent, which means you might not see some of the smartphones in this line-up next year;



“So possibly less Galaxy Megas, Cores, Rounds, Edges and Minis, and if the company gets it right, a new smartphone star”, but this will help the company reduce their cost of production and will also mean they can "increase the number of components shared across mid- to low-end models” (Extremetech).