Slowing demand reported for Samsung’s Galaxy S4

Slowing demand reported for Samsung’s Galaxy S4

07 JUN 2013

Samsung is facing slowing demand for its flagship Galaxy S4 smartphone, with several financial research firms cutting their forecasts on the device.

According to Bloomberg, a JPMorgan Chase analyst said that orders for the device – which went on sale last month – are slowing on weakening demand in Europe, citing supply chain checks.

This could impact Samsung’s profit margin, as a greater proportion of its sales will come from less lucrative mid-tier devices.

Despite an exceptionally strong start – Samsung shifted 10 million Galaxy S4 units in less than a month – JPMorgan Chase said that the next quarter’s shipments will be “disappointing”, with its peak-quarter number “way below our previous estimates”.

Bloomberg said the research firm has cut its full year forecast for the device to 60 million units from 80 million estimated previously.

Meanwhile, Barron’s said that Susquehanna Financial Group had noted that the South Korean giant had been meeting with investors in recent weeks in order to “temper” expectations for Galaxy S4 sales.

According to this report, Samsung is preparing for the effect of a new iPhone launch by Apple in the third quarter, perhaps accompanied by a lower cost smartphone from the US vendor.

Such reports have resulted in Samsung losing $12 billion in market value today. Shares in the South Korean vendor finished down 6.2 percent at their lowest level in four months, wiping out KRW14 trillion of value to bring its market cap to KRW210.2 trillion ($188 billion).

Samsung is also said to be increasing its focus on mid-tier smartphones, as growth rates slow in the premium tier.

The company is currently in the process of capitalising on the “halo” effect created by the new device by offering a lower-spec Galaxy S4 Mini version, and offering the ruggedised Galaxy S4 Active.

And the anticipated launch of the Galaxy Note III later this year will also bolster the company’s position at the high-end.

Author

Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

Read more

Related

Tags