sung, smartlSamsung Electronics, the electronics giant based in South Korea, saw its market value plummet by $12 billion on Friday. Brokerages downgraded the stock that underscored growing concerns over the company’s slowing sales of its Galaxy S4 smartphone, the flagship mobile device for Samsung.
The drop of more than 6% was recorded on the price of Samsung stock comes following the release of two simpler versions of the Galaxy S4, which caused investors to worry the company’s profit margins could fall.
The slide in Samsung’s stock also follows word that Apple, the biggest rival of Samsung, would begin a new trade-in program for its iPhone.
The two new less expensive and stripped down models of the S4, will help Samsung widen the lead it has across the global market for smartphones and keep some of its Asian competitors from gaining market share. However, investors are worried that Samsung is increasing its sales volume at the expense of its profits.
Analysts said sales have slowed for the Galaxy S4, which shortly after its April launch became the company’s fastest selling mobile device.
In general, sales of high end smartphones across the board are falling behind company and analyst expectations, while the mid-end and low-end devices are picking up speed in sales worldwide.
An Apple source said the company would soon start a trade-in program aimed at users who want to trade in an iPhone 4 or 4S for one of its new iPhone 5s.
If that takes place, analysts said it would cut into the sales of Samsung’s Galaxy S4.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.