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Why Samsung's Galaxy S6 and S6 Edge Are Already Huge Hits

By Steve Symington - Mar 12, 2015 at 7:20AM

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With record pre-orders, Samsung's newest flagship devices are off to a great start.

Both the Samsung Galaxy S6 & Galaxy S6 Edge (above) have enjoyed record pre-orders. Credit: Samsung.

When Samsung (NASDAQOTH: SSNLF) first unveiled its new Galaxy S6 and Galaxy S6 Edge smartphones earlier this month, criticism wasn't far behind. 

Most notably, longtime Samsung fans lamented the company's decision to focus on design over utility, which meant not only building the Galaxy S6 from the ground up, but also eliminating key features present in its predecessors such as removable storage, replaceable batteries, and water resistance.

That's not to say the new Galaxy variants didn't pack in their own unique innovations. Both the Galaxy S6 and Galaxy S6 Edge feature Samsung's 64-bit Exynos octacore processors, 3GB RAM, much-improved 16-megapixel rear cameras with optical image stabilization, built-in wireless charging, and a front and back protected by Corning's ultra-durable Gorilla Glass 4. The Galaxy S6 Edge even further distinguishes itself with a gorgeous 5.1-inch, 577ppi Super AMOLED display that curves down both sides of the device.

If anything, however, skeptics worried Samsung was wrong to mimic Apple's (AAPL 2.14%) similar focus on aesthetics -- though branding and ecosystem also played a central role -- which helped Apple sell a mind-boggling 74.5 million iPhones in its most recent quarter. That performance, of course, was driven by the release of Apple's wildly popular iPhone 6 and iPhone 6 Plus models.

Setting records already
As it turns out, those worries may have been unmerited.

According to a report from The Korea Times on Monday, "a top executive at a leading mobile carrier in Europe" told them Samsung has already received 20 million total pre-orders for its newest flagship devices from mobile carriers, including 15 million for the Galaxy S6 and five million for the Galaxy S6 Edge. 

The Korea Times also noted while Samsung Electronics mobile Chief Shin Jong-kyun wouldn't provide specifics, he did partially corroborate that information to a group of Korean reporters, stating "To be honest, pre-orders of the two Galaxy variants from our major clients are really huge." 

In any case, if Samsung has indeed received 20 million total pre-orders for the Galaxy S6 and Galaxy S6 Edge, it would easily represent a new company record.

Once again, though, we should keep in mind these are orders from mobile carriers, not consumers. Verizon, for example, won't begin collecting consumer pre-orders for the Galaxy S6 and S6 Edge until April 1, or roughly a week and a half ahead of the official April 10 launch. But as mobile carriers are hard at work to carefully manage their own respective inventories, carrier pre-orders can be still taken as a rough measure for anticipated consumer demand. 

A bottleneck in supply?
We should also remember Samsung made no such admissions about mobile carrier pre-orders for the Galaxy S5, which "only" shipped an estimated 10 million units in the first 25 days following its launch last April. That was an improvement over the 27 days it took the Galaxy S4 to reach the same milestone, which itself nearly halved the 50 days required to hit 10 million for the Galaxy S3. Nonetheless, overall sales for the Galaxy S5 were a relative disappointment, and lower average selling prices dragged down the Korean giant's profits.

That's why it makes sense that on Tuesday, Korean news site ETNews reported the response was significantly better than even Samsung had anticipated, which caused it to boost its initial production volume for both smartphones by one million units to 13 million. Five million of those will be produced in March, ETNews says, while the remaining eight million will be manufactured in April. This means Samsung could still be well short of fulfilling the reported 20 million carrier pre-order figure by its launch.

Nonetheless, that's an enviable problem to have, and it should go a long way toward reversing the trend of weakness in high-end smartphones sales that have plagued Samsung in recent quarters. If this week's reports on demand for the Galaxy S6 and S6 Edge turn out to be true, it should portend good things for Samsung investors going forward.

 

Steve Symington owns shares of Apple. The Motley Fool recommends Apple, Corning, and Verizon Communications. The Motley Fool owns shares of Apple and Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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