Samsung hit by Galaxy S4 sales woes to the tune of $12 billion off the market valuation
Following on from the pessimistic sales outlook for the Galaxy S4 which we first heard about
Other investors are stating that the main reasons for the selloff are weakening sales expectations and a lull in momentum for the Galaxy S4. Kim Young-chan, an analyst at Shinhan Investment Corp, put the problem down to a weaker than expected performance for high-end smartphones in general.
Sales of high-end handsets are lagging behind expectations, while low- to mid-end handsets are selling briskly worldwide
J.J. Park, an analyst from J.P. Morgan, echoed similar concerns, stating that the third quarter shipments for the Galaxy S4 would likely disappoint many investors, leading to a downgrade in Samsung’s target share price. The Galaxy S4 is selling well with more than 10 million units shipped so far, and analysts had expected sales to reach more than 30 million by the third quarter. However, according to the J.P. Morgan report, the company may not perform quite as well as anticipated, as shipments are in decline in Europe and South Korea post launch.
Our supply chain checks show monthly orders have been cut 20%-30% to 7 to 8 million units starting July
With so much hype and speculation surrounding the launch of the Galaxy S4, it’s always possible that the expectations were simply too high to begin with and that these results are simply a reality check for overly enthusiastic investors. Another factor to consider is that the high-end smartphone market is already quite saturated with products, and competition from the likes of the HTC One could well have hindered Samsung’s performance.
Conjecture concerning the next line-up of Apple products is further fuelling the uncertainty regarding Samsung’s future performance. Bloomberg is expecting Apple to start a trade-in program sometime this month to allow users to trade their older iPhones in the runup to the launch of its latest model, which could have a direct impact on Samsung’s bottom line.
Putting things in perspective however, the Galaxy S4 is still selling well, easily outpacing the Galaxy S3’s impressive launch figures. Samsung also has a strong line-up of other products which are meeting expectations. We’ll have to wait for the official figures before we can confirm exactly how well the Galaxy S4 has performed post launch. Whilst some may be disappointed, the Galaxy S4 is no doubt still going to rake in plenty of profit for Samsung for the foreseeable future.
Via: Android Authority