Samsung’s Galaxy S4 Slowing Sales Worry Investors

Samsung’s Galaxy S4 Slowing Sales Worry Investors

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Samsung’s Galaxy S4 Slowing Sales Worry Investors

Repost from mashable.com <http://mashable.com/2013/06/07/samsung-galaxy-s4-investors/#>Article by Todd Wasserman

Samsung‘s stock price dropped 6% on Friday, erasing $12 billion in marketing value as investors fretted about the company’s smartphone strategy.

In particular, Samsung’s decision to offer stripped-down versions of its Galaxy S4 worried analysts and investors who think the move may eviscerate profit margins. Sales of the S4, initially Samsung’s fastest-selling smartphone, have also fallen off since the device’s introduction in April.

“Sales of high-end handsets are lagging behind expectations, while low- to mid-end handsets are selling briskly worldwide,” Kim Young-chan, an analyst at Shinhan Investment Corp., toldReuters. “As the portion of low- to mid-range handsets is expected to increase in Samsung’s overall mobile phone business, this has also sparked concerns about thinning margins and lower growth.”

J.P. Morgan analyst J.J. Park also told The Wall Street Journal that third-quarter sales for the S4 would likely “disappoint,” and that “supply chain checks show monthly orders have been cut 20%-30% to 7 to 8 million units (from 10 million) starting July.”

Another analyst, Kim Hyun-yong, at E*trade Securities, told the Journal that since Apple is expected to announce a trade-in program for older phones and a new cheaper iPhone, “overall growth prospects for (Samsung’s) smartphone business have dimmed.”

Samsung’s stock price finished trading on Friday in Seoul at its lowest level in four months.

Image via June Yeon-Je/Getty Images

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