back to article Galaxy S4 phondleslab selling like lukewarm cakes, analysts reckon

Samsung Electronics shares have slid nearly three per cent as investors anticipate weaker-than-expected results for the last quarter. A number of analysts have lowered their expectations for the mighty Korean chaebol, saying that they now think fewer smartphones than forecast have shipped and profits will be less than …


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  1. robert_raw

    cant say I know anyone with an S4 but know lots with an S3 on 24 month contracts

    Considering most contracts are 2 years, I can say I am surprised it would affect sales of a new phone 12 month later and considering the numerous amounts of market research I have seen (and of all the people i know) people who buy Android powered phones are less likely to have money (or desire/stupidity) to purchase the latest and greatest each year compared to apple fans.

    1. Anonymous Coward
      Anonymous Coward


      They made alot of noise about how fast the Octa-core chipset was, then punted a slower snapdragon version out to the majority of the buying world because LTE wasn't supported on the faster model.

      The Snapdragon powered one was basicly the HTC One in a different case.

      As the HTC one was already out and cheaper why buy the Samsung?

    2. Anonymous Coward
      Anonymous Coward

      Maybe it's just the staggering cost of the S4?

      Up to a point (say £300) the cost of the phone isn't a big hairy deal because the pain is spread over 24 months on contract, and you've got a circa £15 a month minimum price plan (from the point of view of the major network operators, anyway, as they're not considering SIM only as competition).

      But with the S4 having a retail value of £400+, then the minimum monthly plan with the phone "free" is over thirty quid. Some people can happily pay that, but its well north of the average revenue per user, and so Samsng are pricing themselves out of the market. At a guess that's because they think they can ask fatter margins on an Android device, as costs to produce shouldn't be much different to an S3 or S2 (technology costs fall, offset by improved specification and size).

      1. Rampant Spaniel

        Especially when it only costs about 200 quid to make ($288 depending on the version). I doubt the carriers pay anything near ticket price for these phones either.

    3. AceRimmer
      Thumb Up

      Agreed 2 years contracts and a LOT of people have the S3 already

      Add to that the fact that the S3 is a very capable device and can run pretty much anything thrown at it means that most people have no reason to upgrade.

    4. Anonymous Coward
      Anonymous Coward


      I have an issue with Samsung quality, and I am sure many others have too, so it's a matter of once bitten twice shy, so now that I have been thrice bitten I keep well away from these specialists in the art of copying and making it in crappier and cheaper quality. Now I only buy various bits of kit from Nokia, Asus, Dell and Sony. I must also give some respect to Apple although I steer clear of them for lock-in and other reasons.

      1. AceRimmer

        Re: Quality

        Can't say I've had an issue with Samsung products, we've got :


        Note II

        Plasma TV (now 6 years old)

        Nexus 10 (made by samsung)

        All of which have performed flawlessly so far.

        Having said that, I do believe that most peoples bad "quality" experiences no matter who the manufacturer is can usually be put down to either bad luck or massively over the top expectations

        1. BigAndos

          Re: Quality

          My Samsung TV is five years old and going strong. My previous TV was also Samsung and that one lasted 18 years! My Samsung blu-ray player a bit flaky though. It will periodically turn itself off and on for no reason, and a couple of times the interface has changed itself to Korean which can only be resolved with a good old "power cycle". I think any manufacturer has good days and bad days!

    5. Miek

      Just waiting for my S2 contract to end (August I think) and then an S4 will be in my firm grip. Probably the same for a lot of people, those who bought an S2 will upgrade to the S3 or S4 (there are some good deals on the S3 at the moment)

  2. Anonymous Coward
    Anonymous Coward

    El Reg needs a

    Peak Samsung section now then?

  3. FIA Silver badge

    Are Apple fans really that much different? I've always assumed that Apple's practice of releasing a new phone then an 'upgrade' the following year was mainly due to most people being on a 24 month contract; people either get the base model or the 'S' variant, then move up after 2 years.

    1. Shagbag

      The phone is 'Free' isn't it?

      All the marketing shit says the phone is 'free'. Why can't the S4 be free as well? I smell a rat.

      Fucking bullshit marketing tossers. They give me the shits with their 'free' phone bullshit. These types have no fucking clue as to the time value of money and what the 'market' price is (and it ain't their bullshit list price). Their list prices are just like Boeing's or Airbus's - they don't exist except on paper. No one but a complete an utter fucking moron pays list price for a phone. Within a month of release all phones sell on eBay at below the list price. If I had the chance, I'd line them all up against a wall and 'bowling ball' them with a retractable bolt gun.

      1. Rob K

        Re: The phone is 'Free' isn't it?

        Dude.. take a deep breath and maybe have a sit down.

      2. Anonymous Coward
        Anonymous Coward

        Re: The phone is 'Free' isn't it?

        Yes it is "free" if you pay £37 a month!

  4. Rampant Spaniel

    I think samsung are at risk of doing what htc did a few years back. Too many phones, too many of them with compromises. There is no reason (given how the recent android versions make it difficult to move apps to sd) to have hamstrung it with 16gb only (unless you go to at&t) of which maybe 60% can be used.

    The mega's have slower chips and lower res screens, wheres the true flagship? Without compromise? 1920x1200 screen (unless hiding that effing bar got easier then 1080 is fine), removeable battery, sd slot, 32gb min memory and the best soc they can find, oh and waterproof (why not :-)). Hopefully the note 3 will be that or close but I'm not holding my breath. Thats worth 450 on contract.

    Sony have done a similar thing with the zu, only 16gb, would it have killed them to make it 32? If you are paying 350 on contract then 375 would be fair and make it a significantly more attractive offer. I want my phone \ tablet to still be pretty nippy in 24 months time, I'm going to avoid phones where some areas have been paired down to meet an artificial pricepoint.

    They could even do away with onboard memory and fit an sdxc slot where you can't remove the card without powering off the phone (so android doesn't get upset when it goes missing and therefore all apps and widgets can live on it. That way we can put in any size and speed card we want.

    1. Steve Todd

      You only want to pay an extra $25 for 16GB of flash?

      There's the reason they didn't do it then. It's not the same crappy stuff you find in microSD cards, it has to last and work reliably for the lifetime of the device, plus be a whole lot faster.

      1. Rampant Spaniel

        Re: You only want to pay an extra $25 for 16GB of flash?

        I didn't have a price to hand but I've gone and had a look. The bom for the iphone 4s in 2011 (first result in google for my search, I'm sure prices will have dropped) has 16gb of nand flash for $19.20.

        So in fairness if anything my guess was high, probably about right when you factor in tax, profit etc.

        1. Steve Todd

          Re: You only want to pay an extra $25 for 16GB of flash?

          You've got this odd idea that the BOM in some way represents the selling price. Normal practice is to take the BOM and triple it as the first estimate of RRP when you're designing a device. Within that margin you've got to pay for assembly, shipping, IP, development, marketing, certification, import duties, FX rate hedges etc. Any company selling a 16GB upgrade, using decent quality parts, for less than $50 (and more like as close to $100 as they can get) is going to go broke fast.

          1. Rampant Spaniel

            Re: You only want to pay an extra $25 for 16GB of flash?

            Wow, so you are telling me that adding an extra $10 cost to a phone which already has all you mentioned factored into that selling price should add 5-10x that to the price? A quick check of bom vs off contract prices show about 3x.

            Taking your triple it statement, ok so triple $10, I wasn't far off, especially given thats last years prices and nand has consistantly dropped in price year on year. Infact I about hit it on the head, but thank you for the business lecture. It's been a laugh! Just because apple charges an extra $100 to go from 16 to 32 (oh look they also charge $100 to go from 32 to 64!) doesn't mean it costs that much or has to be sold for that much. Apple charge that much because they can, especially given the lack of a sd slot.

            1. Steve Todd

              Re: You only want to pay an extra $25 for 16GB of flash?

              And yet $50 is exactly how much Samsung want to upgrade the S4 from 16GB to 32GB. Are you starting to realise you know nothing about manufacturing vs marketing yet?

              1. Rampant Spaniel

                Re: You only want to pay an extra $25 for 16GB of flash?

                Are you still on about this? You have already embarassed yourself by basically agreeing with my maths. Yes they want 50 for an upgrade, making it standard on all can result in a lower price. Marketing is exactly what is at play, the price points are artificial which is exactly why they wouldn't go broke doing it.

                The 25 was a rough figure, pretty much inconsequential to everything else I said and you picked on it because you thought you were being clever. You then got proven wrong using your own maths.

                So even if it was a $50 upgrade (which is an appleeqsue because we can price, not because we need to) rather than an across the board spec change, my point was they are limiting 'flagship' phones and wondering why they don't sell as well as they hoped.

                Whether it costs 25 or 50 doesn't matter, are you really suggesting they would go broke doing it at 25 when your own maths said 30 would be fine? Heres a reality check for you, they are doing it because they can, just like apple do. A big reason an upgrade will be priced higher as opposed to a spec change for an entire model is a smaller price differential would result in 0 sales of the lower model. A spec increase in the only model removes that pricing pressure. So again, your own logic is working against what you said. But by alls means keep going, this is too damn funny.

                1. Rampant Spaniel

                  Re: You only want to pay an extra $25 for 16GB of flash?

                  To put it simply, you are saying that $200 of the retail price of the htc one (32gb) is directly attributed to it's nand? I'm not sure that would make much sense as applying that logic would see the full retail price be closer to $2000. Or perhaps, as I said, if it was an across the board upgrade, the price would be closer to $25, or 3x the raw material cost, as it isn't a different sku and doesn't then need to put an artificial price difference between it and another similar sku.

      2. Rampant Spaniel

        Re: You only want to pay an extra $25 for 16GB of flash?

        ok so 2012's iphone is down to $10 for 16gb. Unfortunately the only 2013 price is for the s4 and has the ram and nand grouped together.

  5. Frankee Llonnygog

    If Chris Caso is wrong

    Abbott and Costello will punch a hole in his hat.

    Ahhh - Youtube calls!

  6. John 104

    Surprising, really. I picked up an S4 for the wife when they came out and then one for myself a few weeks later. Fantastic kit. Plenty fast, smooth operation, etc. Easily rooted too. I have no worries about it being powerful in 2 years. It is powerful now, why wouldn't it be powerful later?

    And at the time they weren't easy to come by, at least not in black. That would assume either large numbers of phones flying off shelves (as indicated by the 20 million figure) or a lower supply. 20 million is still a huge amount of phones to ship.

    1. Rampant Spaniel

      The phones won't be any slower, but we will have found new, amusing and unessential uses for them requiring more grunt.

      Plus for unrooted phones there is the joy of finding what new bloatware google has decided to force on your phone and how much the already installed bloat (from google and the carrier) has expanded overnight.

    2. Patrick Moody

      I said all the same things about my Galaxy S2 when I got it less than 2 years ago. A couple of Android upgrades later and I find myself starting to wonder if I should look for something faster when my contract expires.

      On the other hand, the main problem for me is I like the size of my S2 but don't like the 1-day-only battery life, and all the new flagship phones are much bigger and with equally poor endurance. Nobody seems to have really addressed that yet either. I think I might just stick with it on a cheaper rolling monthly contract until someone does.

      1. Rampant Spaniel

        Yup, we already have a decent ps1 emulator, the psp emulator is looking great and in a couple of year or two the ps2 emulator might be decent. Thats assuming of course that we don't have better native games by then. Then there is html5 and all the fun stuff that can bring via the internet. I guess it's more a cautious future proofing, and sure if you only want to do basic things with your phone thats fine :) I get bored on long flights or waiting for brides so being able to prat around on xwing or gran turismo is fun. ymmv :)

    3. Mark .

      "20 million is still a huge amount of phones to ship."

      Exactly - and people should remember, this is just one of a large number of phones that Samsung make. It's a bit sad the media can only focus their attention on one single model at a time.

      For most companies, yes including Apple, selling 20-30 million phones in total is good going. Samsung achieve this with just one of their phones, even though they make loads of similar models, with who knows how many Samsung Android smartphones in total being sold now.

      It's unclear whether this is:

      * People still buying Samsung, but not necessarily the S4.

      * People switching to other Android manufacturers - not a good thing for Samsung, but I think a healthy thing for the market not to be so dominated by just one company.

      * People switching to other platforms - unclear why that would happen at this moment in time.

      * A slow in growth in the market as a whole.

  7. Cliff

    Contracts and values

    2 year contracts plus an even numbered release will hurt this, the S5 will be a massive hit though I'm sure.

    As for 'free' phones - of course the contract is a combination of airtime and repaying the handset subsidy. If I'm paying £36/month (inc VAT) for my Note2, the contract is ~£850 for a ~£500+ phone (more at launch), so £15-ish a month to pay for all the data I can eat (including tethering). Cheaper than the line rental for my home broadband. I count all the texts and calls as a freebie sweetener.

    1. Anonymous Coward
      Anonymous Coward

      Re: Contracts and values

      THERE IS NO SUBSIDY ! you just pay over a period of 24 months plus interest.

      Do your math.

      Although all carriers would "like" you to believe they are subsidizing the phone. What bullshit!

      Its your "free" (not so free) if you pay us £38 a month! Otherwise SIM opnly deal is £ 8 per month. Go figure.

      Idiots. Its becasue of the gullible people like you who believe they are subsidized that these companies make billions! Wake up and smell the coffee.

      1. Anonymous Coward
        Anonymous Coward

        Re: Contracts and values

        There is (or certainly was) more subsidy than you think.

        I happen to know that at least two of the major carriers (UK) back in 2009/10 were subsidising quite a few deals. I remember seeing the figures that indicated they didn't see profit on the average punter (i.e someone who stick within minutes/data allowances etc) in after 22-23 months, this was on an 18 month deal. 2 year contracts were not the norm then.

        I imagine now 2 year deals are the norm this practice may still exist. Their business models rely (or used to) on being able to gouge the idiots that run up huge bills and on people staying with them when they upgrade.

        Similar to the ISP model of the low bandwidth users subsidising the high users, with the added benefit of being able to charge the heavy users too.

      2. Anonymous Coward
        Anonymous Coward


        I always do the maths. I always compare TCO against buying the phone outright and putting it on a SIM only deal. I always get a subsidy. Simples! There is a subsidy if you look (or bend arms) for one.

        1. Charlie Clark Silver badge


          You can normally get any "subsidy" in contract renewal through some kind of rebate or package. I got € 5 a month for two years rebate for renewing a couple of years ago. They wouldn't extend it recently so I've go post-paid PAYG with the same network bringing down my monthly costs from € 10 to less than € 2 (yeah, I don't use it very much because I'm Billy Nomates). Their loss, I'd say.

      3. Cliff

        @ anonymous coward 'gullible people like me'...

        Ok I'll do the math(s) again but slower and more precisely.

        Contract over 24 months £864 (all prices Inc all taxes at 20%)

        Handset when I bought it was retailing at over £600, but let's round down.

        24 months actually unlimited data including tethering - I know it's unlimited, I've done 60GB in a month before - therefore £11/month coming in less than line rental for adsl

        5000 texts, minutes etc - so many I never use them, they are effectively a freebie

        gullible idiots like me get the state of the art handset, inanely good data deal, all the calls we ever need to landlines and other mobiles, and save money overall. I'm sure your $8 deal gets you upto a fair use cap of 1TB/month which I get, plus you pay retail for the handset all in one go without the interest free credit I get. Gosh, I wish I was as smart as you. No wonder you're posting as anonymous coward.

        1. Anonymous Coward
          Anonymous Coward

          Re: @ anonymous coward 'gullible people like me'...

          The name is Bond...................................James Bond (since you insist).

          The point is, just because the Big boys quote RRP, that doesnt mean it is! Apple will quote £900 for a fondleslab, but that does not mean it is! Get that?

          Talktalk & BT call their STB worth £299. But the whole world and his dog know it isnt.

          Take the Google Nexus 4 16GB as an example. Max it costs is £239 or £279 (Retail). Equivalent to sitting between SGS3 and SGS4 interms of quality, performance benchmarks. Add your monthly £8 or £11 allowances and then do the math. SO just because your phone is/was quoted as £600, which you believed to be true, was subsidized when you got it as part of the contract? Maybe you fell for the spin.

          And thats the point I am making. Gullible idiots will buy the seller's spin and argument all day long.

          Comparing it to ADSL is another cop out in your argument. Its not relevant. (Apples vs Oranges - we are talking Mobile and not fixed lines). Unless you desire to please & justify yourself by this substitution alternative costs. Some light relief it might provide to make it a basis for your arguments.

          But where is the subsidy? Maybe OED will highlight the true meaning of subsidy, if look closely.

          THERE IS NO SUBSIDY, just spin to make you part with more of your cash. Subsidy would mean, they sell you the handset at around £200 ish - which would be at cost (slightly below cost) to the carriers (maybe spread over 24 months - interest free) and then give you £11 deals to cover usage.

          Now thats subsidy.

          1. Rampant Spaniel

            Re: @ anonymous coward 'gullible people like me'...

            Depending on the deal it might be more accurate to say they pass on a wholesale discount and allow you to pay some of the balance over a period of time (the proof in that being the discount you can get if you renew without taking a new line). This does vary country to country.

            Yes there are on occasion silly deals, I remember a tmobile deal years ago for a basic nokie phone + 750 mins offpeak, you sent in 4 rebate forms over a year and got the entire contract cost (rental and phone) back from the dealer (not the phone company but the 'broker'), paid from their sales comm. This was rare however.

            In payg some handsets are sold with a subsidy to attract punters. Anyone who has worked in phone sales will know about 'boxers'. The guy who wants 5-10 payg phones and has bags from every phone shop on the high street. This is a true subsidy because you aren't tied into a contract so you can unlock the phone and use it on another network. This may only apply to the UK market though. 'boxers' would sell the phones on abroad, sales reps hated them because the reps were paid on activation and often 3 months use so phones that won't get used on network hurts them.

          2. Mark .

            Re: @ anonymous coward 'gullible people like me'...

            That the Nexus 4 is cheaper than an S3/S4 isn't an argument, because you're comparing different phones - the point is that the Nexus 4 is much cheaper than comparable phones.

            True, we shouldn't go by some made up quote on the RRP, but we should go by what the actual real cost of buying the phone is (the same phone that is, not some alternative cheaper one).

            In my experience, it varies. Sometimes it is cheaper to buy outright, suggesting things aren't always really subsidised. Other times, it's cheaper to get on contract. This was my experience with the Galaxy Nexus - 24 month contract at £31 = £744. Compared to buying outright from Amazon at £400, plus £15/month for equivalent SIM only contract (exactly the same, on the same network), giving £760. (Although yes, it's a fair point to note that the subsidy here wasn't a huge amount, and the idea the phones are "free" is certainly a myth.)

            And yes, it's possible the lower cost comes from a deal from the manufacturer, rather than being paid for by the network - who knows.

  8. Chris Gray 1

    S4 battery

    This is a good place to mention this - I was having the "Mediaserver using battery" problem a while ago, and did some searching via Google. If you are not heavily into cloud use and all the various Googley services, go into the App Manager and disable nearly everything that has "sync" in its name. Use common sense of course! Your battery will thank you. I bought mine as a tech toy - have no real *need* for it. I expect I can now get nearly 4 days out of a charge. (I've got background data off, usually cell data off, GPS off, NFC off, and usually WiFi off. And "save battery" mode of course.)

  9. 1Rafayal

    apparently, there will be a version of the S4 on Google Play soon with stock Android installed.

    It was supposed to be available today, along with a version of the HTC One, but cannot find it on the store yet...

  10. Charlie Clark Silver badge

    Wait for the real figures

    Here in Germany I see lots of people on the street with S4s but also S3s and a few of the big HTC's. It wouldn't surprise me to see worldwide sales of the S4 to be somewhat above the S3 over its first quarter so still impressive but less growth than expected but I'll wait for real shipped/sold figures. Would be nice to see analysts reimburse their customers if the get it wrong.

  11. Anonymous Coward


    You used my word. You made my day!

    Don't know what to call it?

  12. AlexS

    Contract phones are the past.

    Get a Nexus 4 and tell them to shove their contract.

  13. ejmfoley

    They're selling 20,000,000 phones every 3 months and some analyst is disappointed? Wha't wrong with this picture?

    1. Pascal Monett Silver badge

      They're marketing people. With them, the rule is simple : every next month must do better than before, else the performance is "disappointing".

      Since the S4 started at 30 million units, the fact that the next quarter "only" does 20 million is perceived as bad.

      Which also means that a bunch of Samsung marketroids are going to miss their quarterly targets, and some just might be fired for it, because marketroids have the same quarterly requirements - to do better and better every month.

      Of course, for marketroids it is simple : if you cannot follow the ever-increasing rise of your targets, you end up fired and replaced by a junior marketroid with the same target you had when you started. Then the target gets raised and junion embarks on the same treadmill that will lead to his identical demise.

  14. BigAndos

    Smartphones heading towards PC territory?

    Is this the beginning of smartphones reaching "feature maturity" like PC's have? This is my clumsy term for the fact that PC's reached a state a few years ago where the hardware could handle everything the average user wants to do so upgrading gives minimal value.

    I have an iPhone 4S, I would like to replace it with a Galaxy S4 or HTC One when the contract runs out. However, if I'm brutally honest the 4S does everything I could possibly want out of a Smartphone so think I'll switch to a sim only plan and wait a while. A bigger screen would be nice, and so would better battery life but not worth shelling out hundreds for a new phone.

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