Samsung Says Galaxy Note 7 Demand Is Strong

August 24, 2016, 12:13 AM UTC
Photograph by Justin Sullivan — Getty Images

(Reuters) – Tech giant Samsung said on Wednesday stronger-than-expected demand for the new Galaxy Note 7 is causing supply constraints globally, suggesting strong initial sales for the premium device.

“As pre-order results for the Galaxy Note 7 have far exceeded our estimates, its release date in some markets has been adjusted,” Samsung told Reuters in a statement.

The world’s top smartphone maker is betting the new premium device will help the business maintain sales and earnings momentum in the second half even as rivals such as Apple prepare to launch new devices in the coming months.

While strong smartphone sales could lead to another quarter of solid mobile earnings for the company, Samsung also risks missing out on revenue should shortages persist. Inability to supply enough of the curved-screen Galaxy S6 edge phone last year cost the company, analysts and investors have said.

Samsung said it was trying to boost production and aimed to meet demand “as early as possible,” without elaborating further.

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“Whatever the company gets out of the Note 7 will be a bonus factor, since what the market has been betting on for the second half is a pickup in earnings from the display and semiconductor businesses,” KTB Asset Management fund manager Lee Jin-woo said.

“Considering Samsung’s track record I think the supply problem will be resolved quickly.”

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