Customers line up to order Samsung Electronics' Galaxy S8 and S8 Plus smartphones at a KT retail store in Seoul. The tech giant began selling the handsets on Friday. / Courtesy of KT
S8 sales to surpass predecessor
By Lee Min-hyung
Samsung Electronics' premium smartphones ― the Galaxy S8 and S8 Plus ― have hit the shelves here, with the Seoul-based tech giant seeking to continue an upward momentum after their record pre-order.
The flagship lineup is off to a promising start, dispelling previous concerns over the Galaxy Note 7's battery problems.
Breaking the one-year hiatus in the company's premium smartphone series, Samsung started accepting preorders for the S8 and its larger version S8 Plus on Apr. 7. Preorder sales are estimated to have topped 1 million here.
Market observers remain optimistic that Samsung's mobile unit will be able to make a successful comeback from last year's Note 7 debacle.
"We expect the company to sell more than 50 million S8 smartphones by the end of this year, surpassing its predecessor, the S7," said Noh Geun-chang, an analyst at HMC Investment Securities.
"This is due to iPhone 7 sales declining with the upcoming Apple flagship smartphone the iPhone 8 debuting in the fourth quarter of this year."
The analyst said the one-year break from the Samsung premium lineup was another key reason that will drive up the Galaxy smartphone's sales.
"Besides the break, the company has pushed for a radical shift in the phone's hardware and design, triggering users to change their existing devices," Noh said.
The company is also highly likely to increase its marketing budget this year in a bid to regain its reputation following the Note 7 sales suspension over a battery defect, he said.
However, Samsung Electronics is facing problems amid reports of the new device's red-toned display. More customers are complaining and raising the issue.
But it is unlikely to affect sales, according to Kim Dong-won, an analyst at KB Securities.
"It will have limited impact on the S8 sales," Kim said in a note to investors.
"This is because the controversy surrounding the red-tint display is likely to have stemmed from problems in its software, rather than from the hardware."
The analyst expects Samsung Electronics to post an operating profit of 12.5 trillion won ($11 billion) in the second quarter of this year, up 54 percent from a year ago, amid the S8's rosy sales outlook.
"Samsung's earnings will beat a market consensus of some 12 trillion won," he said.
"The potential growth is attributable to robust S8 sales, which will drive up the Samsung mobile unit's operating profit by 1 trillion won in the second quarter from a quarter earlier. Increasing prices of memory chips and organic light-emitting diode panels will also boost its earnings."