Samsung Galaxy S25 Edge sales ‘underwhelming’

Samsung is reducing production of its Galaxy S25 Edge model due to weaker-than-expected sales, and plans to replace the Plus model with an Edge model in the upcoming Galaxy S26 series due to the Plus model's historically poor performance. Simultaneously, Samsung is increasing production of Galaxy Z7 foldable phones for the US market in June, raising the target from 400,000 to 600,000 units, in anticipation of impending US tariffs, although overall foldable production is down from initial plans due to a strategy of steady production increases.

Analysis

Samsung is navigating a complex operational environment marked by underperformance in its conventional smartphone segment and strategic adjustments in its foldable category. The Galaxy S25 Edge smartphone, launched last month, is registering sales below company expectations, prompting a considerable reduction in its production volume for the current month. This early sales nosedive is a concerning indicator, given that new phone models conventionally maintain strong sales for at least three months, and it presents a challenge for Samsung's plan to substitute the historically weaker Plus model with an Edge variant in next year’s Galaxy S26 series. Concurrently, Samsung is proactively increasing its June production of Galaxy Z7 foldable phones designated for the US market from 400,000 to 600,000 units, a move explicitly aimed at pre-empting anticipated US tariffs. While US-bound foldable shipments are rising, the total global foldable production for June, at 930,000 units (with Z Fold 7 accounting for 440,000 units), is revised downwards from an initial plan of 1.34 million units (where Z Fold 7 was to be 630,000 units). This revision reflects a strategic shift towards a more measured and steady increase in production, with further ramp-ups anticipated in July.

Key Decisions for Investors

• Investors should closely monitor sales figures and market reception for the upcoming Galaxy S26 Edge model, as its performance will be a key indicator of the success of Samsung's revised S-series strategy following the S25 Edge's weak sales.
• The increased US-bound foldable inventory ahead of tariffs is a prudent short-term measure, but attention should be paid to potential impacts on margins and the sustainability of demand for these premium devices under new tariff conditions.
• The moderated overall foldable production ramp-up, despite specific US market adjustments, suggests a more cautious growth outlook for this segment in the immediate term, requiring investors to assess the pace of market penetration and profitability.