Samsung shares plummet over Galaxy S4 profit fears

Samsung shares plummet over Galaxy S4 profit fears

Summary: The tech giant's shares have reached a four-month low due to a financial services firm cutting profit estimates.

TOPICS: Samsung

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.

Topic: Samsung

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  • Is Samsung Taking The Lion's Share Of Android Profits Or Not?

    Looks like competition from other Android players is evening up the score a bit. Isn't a free market wonderful?
    • Spinning that fast will give you a blurred view.

      It's nothing to do with android vs whoever. We heard the samething rumoured about iPhone 5 around Christmas. The growth in demand for flagship devices is just slowing, that's all. Not everyone needs a 5-600 quid phone, and as the tech moves to the cheaper end they are realising that. If people can avoid a 2 year contract, a percentage will.

      Taking apple as an example (because it can't get the android fanboys all worked up) the 3GS was underpowered - literally; they under locked it. It also came out in 2009 and by the time it went off sale last year it was limping along at best. The world moved on without it. The i4 by contrast is still a perfectly acceptable device that apps aren't pushing the resources of. By the time you get to the 4s and 5... To many users they are going to do the same things -sure the update is good, but if you had a 4s why update when you can keep using what you need?

      Same difference with the s3 and s4 - if my contract was ending, it'd make more sense for me to upgrade to an s3 than s4 and save every month?

      Smartphone sales are booming. Samsung is continuing to dominate the android and smartphone market in general, but for a lot of people focus is moving from the flagship to middle Tier devices. You don't have to have the best to have a proper smartphone anymore.
      • Exactly right.

        End user uptake of mobile devices sporting 1080p screens has been as slow as a sloth. If you compare web page views of mobile 1080p displays to the unique 320x568 point display of the iPhone 5 (it is helpful 1080p screens are new and very limited in what devices sport them and the iPhone 5 had a new resolution), there are some interesting points:

        1) there was no pent up demand for flagship 1080p devices.

        2) after the first 40 days, the iPhone 5 had about 4x-7x greater web presence than all 1080p based mobile devices in countries like the US, UK, Germany and Feance.

        3) 1080p mobile devices are a hot ticket item in South Korea.

        4) at the world wide level, 1080p devices still don't show on stats 45 days after GS4/HTC One availability. The iPhone 5 showed up in 4-5 days and 1 day in developed nations.

        This means either people don't use these nice displays to browse the web or the actual sales through is very low. Personally, I would expect usage patterns of a GS4 and an iPhone 5 to be similar. If this is the case, of the 15+ million 1080p phones shipped, only 2-4 million have so far found a home.
        • Shipped not Equal to Sold

          That's what Samsung does: shipped.
          Cun Con
          • Channel stuffed.

            How else would JPMorgan know that next quarter's sales were heading down after this quarter's sales...em...shipments were supposedly so good?
        • Re: If you compare web page views

          We already know that Iphone users are using their phones more like feature phones (browsing the web etc) compared to Android users who use theirs as smartphones.
          • site t that's it. ..

            ... NOT. .. with the larger screen, surfing on the S3 and S4 is a dream compared to the iPhone. Trust me when I say that there are many folks that have these phones and they use them as full feature devices.
            Cory Ducey
      • Lack of a compelling feature

        I think the biggest factor affecting both Apple and Samsung is the lack of a new, compelling feature.

        For the i4S it was Suri, combined with enough hardware features to really get people worked up to want to rush out and buy it. (yeah, it was B.S. on Apple's part to not make it available to older models but that's Apple for you). For Samsung the S3 really stood out from the generic Android crowd. I think it was the large, beautiful display and NFC?

        Personally I don't want to lose my unlimited data contract with Verizon (switching carriers isn't an option for me) which will happen if I get a new, subsidized phone and LTE isn't a big enough reason to upgrade.
        • The next big thing

          Agreed - I think smartphones have peaked in terms of tech, utility and popularity. Really - I prefer a world where everyone is not glued to the boob-tube in their hands.
      • the technology will decrease in price

        only when newer devices come out and slower devices lack the power for modern apps... depending on need but the only frivolity involves games, an ironically important part of our economy (apparently... no annoyed fowl over that...)
    • until you are hurt by it...

      look at the job ads and degrees demanded, then pay offered. now look up college costs. colleges see that the bigger degrees are cash cows for them and since there is no real competition... try being a student, since real life wants these degrees... I can predict some responses to this so I might remember to check back...
    • Isn't Microsoft the only one making money off Andriod

      Didn't I see a story they get $10 each phone sold?
  • Well...

    That was fun while it lasted.
  • it's simple, current generations are good enough

    I'm still running a Note 1. Would I like a Note 2? Galaxy S4? Samsung Mega? Sure but while some new features are compelling, nothing here to make me want to drop $500-$600 on a new phone right now.

    Although they did move the ear phone to the bottom of the phone(still like that commercial).
    • Same excuse people are making for...

      ...nosediving PC sales.

      Funny, that.
  • Samsung lost it's mojo already?

    After 4 years of climbing to the top of the mountain, they finally reach the pinnacle and then fall-off in nine months. If this was Apple, there'd be stream of "no innovation", "closed OS" and "walled garden" comments from the 'roid boys. Let the justification begin.
  • Technology Satuated

    Samsung can't go bigger or thinner on Galaxy phones, can't add any other tech in a phone besides those useless gimmicks. At the end of the day, it's a phone and you can't do much with it. So, they should look for something new to build their ecosystem and make GS devices as parts of that Sammung Game Console which links all Galaxy devices to Samsung TVs.
    Cun Con
  • Gone!

    Falling share!
    Profit doom!
    Unable to innovate!
    Taller, thinner, faster doesn't cut it anymore!
    They had a good run!
    They're gone!

    Oh wait, I thought this was an article about Apple...
    costa k
  • It's a maturing market

    this is an example of a market maturing. Computers are a couple of years ahead of smart phones, that is all. when looking at increases you compare to last years numbers. when sales a small increases can be huge based on a percent increase from last year. When sales are huge, it is harder and harder to increase based on a percent increase from last yer.