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At the peak of the initial release of Apple’s iPhone 7, Samsung announced new prospects on its flagship mobile phone products. One of the said products is the release and the growing demand for the Samsung Galaxy Note 7 whose pre-orders were recently capped in U.K. due to insistent demand and the growing number of orders two days prior to its official release.

The increase in the shares of Samsung Electronics drove the benchmark Korea Composite Stock Price Index to rally to 0.28%.

Since the start of the year, Samsung has experienced a rally in sales and stocks with the release of the S7 while it outshines Apple with a slow slump.

With the introduction of the Galaxy S7 back in April earlier this year, the Galaxy Note 7 made quite some headlines with a dual-edge display, an iris scanner, and USB Type-C. Although the new Smartphone received mixed criticisms of having the same features as the Galaxy S7 with an added stylus or what they called an S-Pen, Samsung Designers have stated that the Galaxy Note is different not just from the recent Note series but from their other units as well.

Samsung’s Q1 Earnings Report

From a working cash flow of $5.38 billion or 6.68 trillion won, Samsung has earned $3.4 billion or 3.89 trillion won worth of profits which comprised most of their sales from the Samsung Galaxy S7 and S7 Edge.

FSMNewsGarnering a total of a 42% gain in their profits, the net profits were a huge leap from the past two years of 3.22 trillion won and 4.63 trillion won respectively.

The company’s other unit lines specifically the Galaxy J and A series were also received well by the general public because of the improved handset specs and the affordability feature of the phones.

A Promising Galaxy Note 7

One of the notable specs of the Galaxy Note 7 is that it uses an Aluminum and Gorilla Glass 5 which will be offered in three different tones and one color option to be released outside the U.S. The unit showcases a dual-edge curved display with a 5.7 HD screen and Quad Core with a 14 nm processor, 4GB RAM, an internal storage of 64GB which can be expanded to 256GB through a microSD slot. The phone features fast charging with a 3500mAh battery with options for wireless charging. The camera, meanwhile, features a 5-megapixel camera for the front while 12-megapixels for the rear camera and an f-stop of 1.7 for both cameras.

Although the company featured a pretty impressive phone, the limited number of stocks both in the U.S. and U.K. is still limited which is probably why the stocks were down despite the positive feedbacks on the product. Prior to the unit’s official release last August 19, stocks rallied by 2.13% to $1,500. Trading volume recorded shares of 385.3 million or shares worth 4.8 trillion won or $4.27 million.

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(Chart is taken from Yahoo! Finance)

As of now, Samsung’s success had outraced Apple with a total of 30% rally this year compared to Apple Inc.’s 4% increase although investors are now expecting and awaiting the release of the much awaited iPhone 7 this coming September which is expected to change the ever increasing success of Samsung. The Samsun Galaxy S7 has reportedly exceeded sales expectations with U.S. carriers promoting the Samsung lines to a large number of its consumers.

Yuanta Securities Co. Analyst Lee Jae Jun stated that “The Note 7 is expected to outsell its predecessor and Samsung will be able to keep that spirit alive at least until early next year because the upcoming iPhones won’t likely offer big surprises this time around.”

Also along with the release of the Samsung Galaxy S7 are other high-end S units in different ranges that appealed to the masses. This led to their earnings to rally until the middle of the year.

Delayed shipments in other countries

Due to the large number of pre-orders, some colors of the Galaxy Note 7 will not be available in less than a month. Samsung Canada has left a statement regarding the unpredicted amount of pre-orders but is working on getting all the orders delivered.

Meanwhile, Europe has experienced a very limited stock of the said unit leading Samsung to place a cap on the pre-orders. Countries like Netherlands, Russia, Malaysia, and Ukraine reportedly experienced delayed orders and shipments.

Samsung’s plans to release refurbished SmartPhones

With the trend started by Apple to release certified pre-owned versions of the iPhone 5s, 6, and 6 plus—Samsung received a demand to release refurbished phones after a string of good reviews for the new Galaxy S7 and Galaxy Note 7 with comments of it being more popular.

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In countries like South Korea and the United States, one-year upgrade programs have been made and have led to the company with plans to refurbish high-end phones that have been returned to them.

According to Samsung’s most recent financial earnings, the past two years has been their best earnings so far and is looking to this refurbishing program to boost their mobile sales. This would be popular among those who are looking to buy high-end Smartphones with high specifications without breaking the bank.

Conclusion

Compared to the release of the high-end Smartphones back in 2011, the demand has potentially decreased since then and with the company’s top competitor being criticized for less and fewer innovations on their new models, Samsung has opened up a newfound interest among its consumers with the release of their Samsung S7 and S7 Edge and with the positive reception of the recently released Samsung Galaxy Note 7.

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With Samsung not expecting the increasingly high demand for their newest unit, without an increase in their production, there might be a decline in their shares but the sales which have rocketed for the past two years will probably go on providing the Note 7 will receive more upbeat comments as more people receive their phones.

Given circumstances, any more news regarding a shortage in the stocks of the Note 7 can possibility attribute in a decline of their shares.

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