Samsung's shares have fallen to a four-month low after JPMorgan Chase cut profit estimates.
The financial services firm cut share-price estimates for Samsung by 9.5 percent to 1.9 million won and lowered its 2013 earnings estimates by 9 percent -- citing slow demand for the flagship Galaxy S4 smartphone, according to Bloomberg. Poor consumer demand stemming from Europe is likely to impact demand, and JPMorgan Chase now expects annual S4 shipments to be 20 - 30 percent lower than previously forecast.
Samsung was expected to ship 7-8 million units per month from July. Previous estimates suggested that Samsung would sell 80 million units this year, but analysts now expect this figure to be closer to 60 million.
Samsung says it sold 10 million Galaxy S4 units within a month of launch, but JPMorgan analysts say that the smartphone's "peak-quarter number seems way below our previous estimates." Within an analyst note dated yesterday, the financial services firm said that compared to the Galaxy S3, the new flagship model had a "stronger momentum in the first quarter of launch," but "the following quarter's shipment is expected to be disappointing."
As a consequence, the South Korean firm's shares fell as much as 6.2 percent by the end of Seoul trading, a four-month low and the largest singular drop in nine months.
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.
The S4's little brother was launched in the hope of boosting Samsung's worldwide smartphone marketshare by catering to those who want a low-end mobile device. comScore estimates that Samsung's global marketshare of smartphone subscribers has reached 22 percent, a 0.6 percentage point drop quarter-on-quarter. In contrast, Apple has enjoyed a boost of 1.4 percentage points, snagging 39.2 percent of the market.