Galaxy S4 sales predicted to be lower than anticipated, despite strong performance so far

Galaxy S4

Despite strong sales performance for the Galaxy S4 so far, it looks like the company, as well as some analysts expect the company to sell less units than initially believed.

Galaxy S4 sales dropping?

A new report from Barrons reveals that Susquehanna Financial Group has recently issued a Neutral rating on Broadcom stock and a Positive rating on Qualcomm and Maxim Integrated Products stock. Why are these companies important for the Galaxy S4? Well, they all supply parts for the Galaxy S4, so a drop in handset shipments will obviously affect those companies as well, according to analyst Chris Caso. Of those companies, Maxim and Broadcom are said to miss expectations, as Galaxy S4 shipments are expected to be lowered.

The same analyst says that Samsung has been meeting investors to “temper” expectations for Galaxy S4 sales. Sales forecast for the current quarter are down to 20 million from 25 million while Q3 expectations have also been lowered down to 20 million from 30 million.

Mehdi Hosseini, an analyst from the same Group, said that Samsung is preparing for the introduction of new iPhones in the third quarter, including the rumored low-cost iPhone models. According to him, Samsung is interested in “placing greater emphasis on less-expensive models of its own,” which could replace feature phones for certain consumers..

The Q3 Samsung smartphone growth is expected to be of “low to mid single digits,” including “potentially flat GS4 units.” That won’t be enough to satisfy investor needs for companies like Maxim and Broadcom, whose businesses are tied to Samsung’s smartphone quarterly sales – Q3 sequential quarterly growth for each company is expected to be lower than during the same time last year. Here’s a full quote from Caso’s note:

Our current estimates reflect 12% Q/Q growth for MXIM’s consumer business in 3Q, the vast majority of which represents Samsung handset business. Last year, MXIM’s consumer business posted 13% Q/Q growth in 3Q when Samsung’s smartphone business was up 10% Q/Q (and the GS3 volume tripled Q/Q in 3Q). Based on expectations for low to mid single digit Q/Q Samsung smartphone growth in 3Q, and potentially flat GS4 units, our 3Q consumer estimates for MXIM may be aggressive […] We likewise have BRCM’s mobile wireless segment modeled up 14% Q/Q in 3Q. Samsung was a 17% customer for BRCM in 2012. BRCM’s baseband revenue is likely to experience stronger growth in 3Q due to growth in the mid and low end phones, but BRCM’s WLAN business at Samsung is larger, and is likely to closely mirror Samsung’s low to mid single digit growth expectations, which we believe is below investor expectations.

The Galaxy S4 is already the fastest selling Android handset in Samsung’s and Android’s history, with over 10 million units shipped in the first month alone. Comparatively, the HTC One has sold over 5 million since launch, with the device hitting stores before the Galaxy S4. Even so, Samsung …read more

Via: Android Authority

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