Samsung Galaxy S4 Fears Wipe £7.7bn Off Market Value

Around $12 billion (£7.7bn) has been wiped off Samsung’s market value after brokers and analysts expressed concerns of narrowing profit margins and slowing sales of its smartphone range.

Shares in the Korean manufacturer decreased by six percent – the largest daily percentage drop since August 2012 when stock slid by seven percent after Samsung was ordered to pay Apple £664 million ($1.04bn) for patent infringements.

Investors are concerned that sales of the Samsung Galaxy S4 are slowing up, despite the flagship smartphone becoming Samsung’s fastest selling handset ever in in April. The company claimed earlier this month that it had sold ten million units so far and was shifting four devices every second.

Samsung Galaxy S4 fears

However JPMorgan is among those unconvinced and has slashed its earnings estimates due to perceived weak demand in Europe and South Korea.

It has also been suggested that there are fears that Samsung is jeopardising the Samsung Galaxy S4’s profit margins by releasing two new versions of the smartphone – the Samsung Galaxy S4 Mini and Samsung Galaxy S4 Active in the past month.

The Galaxy S4 Mini is more compact than its bigger brother with a weaker processor, while the Galaxy S4 Active is a more durable waterproof version.

By releasing two more smartphones, shareholders are concerned that Samsung is prioritising volume over profit as it seeks to fend of competition from rival manufacturers. Further harming share price is the news that Apple is reportedly preparing a trade-in programme which will allow users to exchange older iPhones for the latest model.

Regardless of this latest setback, Samsung is still the largest smartphone manufacturer in the world with a 30.8 percent share of the global market, according to research firm Gartner, contributing to record profits of £5.2 billion in the first three months of 2013.

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