Samsung Electronics Co. missed analysts' estimates of its second-quarter profit after the disappointing sales figure of its flagship smartphone, Samsung Galaxy S6, according to a report by Bloomberg.
The report shows Samsung's net income, which excludes minority interest, came in at 5.63 trillion won, or $4.9 billion, well below the 6 trillion won average of estimates compiled by Bloomberg.
This will be the fifth straight decline of Samsung.
The missed estimate is due to disappointing sales of Samsung's flagship smartphone, the Galaxy S6.
Bloomberg reports that the Galaxy S6 suffered from Samsung's misread of the S6 Edge's demand in the market. The company failed to produce enough supplies of the curved screen smartphone to meet the demand.
The regular Galaxy S6 also took a beating from Apple's bigger iPhones.
Lee Seung Woo, an analyst at IBK Securities Co. in Seoul, Korea, told Bloomberg that Samsung failed to meet the "golden timing" of the device's demand in the market due to supply issues.
"Sales of S6 devices are expected to shrink further in the third quarter and its smartphone slump could spill over to other component businesses, including chips," he said.
Operating profit at the mobile phone unit is at 2.76 trillion won, down from the 4.42 trillion won a year earlier, according to Bloomberg.
A report from CNET mentions that Samsung warned that the second half of the year is "expected to present mounting challenges."
Aside from intense competition from Apple's iPhone 6 and iPhone 6 Plus, which now offers a bigger screen, Samsung also faces competition from Chinese smartphone makers.
The offering of a more affordable but still powerful smartphone device adds to Samsung's problems.
Executive Director Neil Mawston of Strategy Analytics, a research firm, told Bloomberg that China is becoming a problem for Samsung and it needs to address it soon.
CNET adds that Samsung hopes to improve its mobile business by adjusting the price of Galaxy S6 and S6 Edge, and offering new premium mid-range and low-end smartphone models.
In addition, CNET reported that a person familiar with the matter said that the price cut to the Galaxy S6 and S6 Edge is a way for Samsung to attract new buyers.
