Friday, May 24, 2024

Samsung Shares Drop on Fears of Slowing Smartphone Sales

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Samsung’s stock prices experienced its biggest single-day decline in six months on Friday. Analysts and investors are concerned that sales of the Galaxy S4 smartphone could be slowing and that newly released lower-priced models could eat into the S4’s profits.

Miyoung Kim with Reuters reported, “Samsung Electronics Co lost $12 billion in market value on Friday, hit by brokerage downgrades that have underscored concerns about slowing sales of its flagship Galaxy S4 smartphone. The share slide of more than 6 percent comes after it recently introduced two stripped-down versions of the S4, fanning worries that profit margins for its mobile business will suffer. It also follows a report that arch-rival Apple will begin a trade-in program for iPhones.”

The Wall Street Journal’s Min-Jeong Lee added, “Traders said the decline was triggered by a research note from J.P. Morgan analyst J.J. Park, who wrote that shipments of the Galaxy S4 for the third quarter would likely ‘disappoint’ investors, resulting in lower-than-expected margins for Samsung. ‘Our supply chain checks show monthly orders have been cut 20%-30% to 7 to 8 million units (from 10 million) starting July,’ wrote Mr. Park. He downgraded Samsung’s share price target to KRW1,900,000 from KRW2,100,000 previously.”

ZDNet’s Charlie Osborne noted, “The electronics maker unveiled a less powerful version of the flagship phone last week in order to take on rival Apple in developing markets including China. The Galaxy S4 Mini, equipped with a 4.3-inch display, has many reduced specifications; including camera resolution, battery size, processor speed and very little internal storage.”

VentureBeat’s Devindra Hardawar commented, “Samsung’s Galaxy S smartphones have been a smashing success for the past few years — and notably, Samsung’s the only Android manufacturer that’s making a significant profit. After the insane sales of the Galaxy S III (which sold more than 30 million units as of March), any slowdown with the Galaxy S4′s sales could be a huge problem for the company.”

Subscribe to Data Insider

Learn the latest news and best practices about data science, big data analytics, artificial intelligence, data security, and more.

Similar articles

Get the Free Newsletter!

Subscribe to Data Insider for top news, trends & analysis

Latest Articles