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Samsung Shareprice Hurt by Smartphone Worries

Samsung saw its market value drop by US$12 billion on Friday as its shareprice was hit by concerns over slowing smartphone sales.

The share price fell by six percent, fueled by analyst concerns that the introduction of lower-cost versions of its flagship Galaxy S4 smartphone would eat into profit margins.

“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.” Kim Young-chan, an analyst at Shinhan Investment Corp told the Reuters news agency.

Although moving down the price point is expected to boost overall sales, and hence revenues, some analysts are concerned that the company is chasing market share over profits.

In addition, there are signs that sales of the flagship phone, the Galaxy S4 itself are also slowing.

Rival Apple is expected to make moves into the lower-end of the smartphone market as well, either by launching a specific handset, or based on recent reports, encouraging the refurbishment of older models for sale at a discount in developing markets.


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