Samsung
Electronics Co lost $12 billion in market value on Friday, hit by
brokerage downgrades that have underscored concerns about slowing sales
of its flagship Galaxy S4 smartphone.
The share slide of more than 6 percent comes after it recently introduced two stripped-down versions
of the S4, fanning worries that profit margins for its mobile business will suffer. It also follows a report that arch-rival Apple will begin a trade-in programme for iPhones. The new stripped-down S4 models will help it widen its lead in the global smartphone market and fend off Chinese competitors, but some fear that the South Korean tech giant is trading in profits for volume.
Analysts say sales momentum for the high-end version of the S4, which became its fastest selling smartphone since it launch in late April, has slowed.
Samsung unveils new Galaxy S4 'Mini'
"Sales of high-end handsets are lagging behind expectations, while
low- to mid-end handsets are selling briskly worldwide," said Kim
Young-chan, an analyst at Shinhan Investment Corp.
"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."
Apple angst
Apple will start a programme this month to allow users to trade their older iPhones for the newest model, Bloomberg news agency cited people familiar with the plan as saying, a first for the company as it prepares to introduce a new version of the smartphone.
"With Apple widely expected to announce an older iPhone trade-in programme and also a new cheaper iPhone, overall growth prospects for (Samsung's) smartphone business have dimmed," said Kim Hyun-yong, an analyst at E*trade Securities.
Apple hints at a cheaper version of the iPhone
"Second-quarter results will be solid but we have to see whether the trend can be sustainable going forward."
Shares in Samsung finished down 6.2 percent at their lowest level in four months, wiping out 14 trillion won of value to bring its market cap to 210.2 trillion won.
It was their biggest daily percentage drop since late August when the stock tumbled more than 7 percent following a U.S. jury verdict that it infringed on Apple's patents.
Apple's gain, Samsung's loss
Samsung, which represents nearly 20 percent of the main bourse's market value, helped send the main stock index 1.9 percent lower, while suppliers of smartphone components were also hammered.
The share slide of more than 6 percent comes after it recently introduced two stripped-down versions
of the S4, fanning worries that profit margins for its mobile business will suffer. It also follows a report that arch-rival Apple will begin a trade-in programme for iPhones. The new stripped-down S4 models will help it widen its lead in the global smartphone market and fend off Chinese competitors, but some fear that the South Korean tech giant is trading in profits for volume.
Analysts say sales momentum for the high-end version of the S4, which became its fastest selling smartphone since it launch in late April, has slowed.
Samsung unveils new Galaxy S4 'Mini'
A man walks past a signboard advertising Samsung
Electronics smart phones at a Samsung mobile shop in Seoul. Photo:AFP /
Jung Yeon-Je
"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."
Apple angst
Apple will start a programme this month to allow users to trade their older iPhones for the newest model, Bloomberg news agency cited people familiar with the plan as saying, a first for the company as it prepares to introduce a new version of the smartphone.
"With Apple widely expected to announce an older iPhone trade-in programme and also a new cheaper iPhone, overall growth prospects for (Samsung's) smartphone business have dimmed," said Kim Hyun-yong, an analyst at E*trade Securities.
Apple hints at a cheaper version of the iPhone
"Second-quarter results will be solid but we have to see whether the trend can be sustainable going forward."
Shares in Samsung finished down 6.2 percent at their lowest level in four months, wiping out 14 trillion won of value to bring its market cap to 210.2 trillion won.
It was their biggest daily percentage drop since late August when the stock tumbled more than 7 percent following a U.S. jury verdict that it infringed on Apple's patents.
Apple's gain, Samsung's loss
Samsung, which represents nearly 20 percent of the main bourse's market value, helped send the main stock index 1.9 percent lower, while suppliers of smartphone components were also hammered.
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