When it announced its Galaxy S4 mobile phone on March 14, Samsung Electronics Co., Ltd.
(OTCMKTS:SSNLF) predicted a future of broken records and new highs.
Sporting a 5” Super AMOLED Full HD display, full LTE features, and either Samsung’s Exynos 5 chip or one of Qualcomm Incorporated’s
(NASDAQ:QCOM) Snapdragon S4 Pros underneath it all, the Galaxy S4 is in good company amongst the most powerful smartphones available today.
As analysts drank the Kool-Aid, record-breaking forecasts for Samsung sales began to come in and confidence grew. With reports of 10 million Galaxy S4s sold in less than a month following the phone’s April 27 release, things continued to look up. However, the tide soon turned against the South Korea-based company -- and in a big way.
Taking into consideration the incredibly saturated smartphone market and the Galaxy S4’s lack of any unique or awe-inspiring features, Woori Investment & Securities in South Korea reduced its earnings outlook for Samsung on June 5. From there, the domino effect led Morgan Stanley, Goldman Sachs, and other forecasters to reassess previously glowing estimates of Samsung’s performance.
Following the wave of downgraded estimates beginning on June 5, Samsung stock fell from $686.50 per share on June 4 to $606.50 per share on June 17. Most of this hit took place between June 4 and June 13, and it appears that Samsung’s prices have leveled off recently.
This stabilization could signal new growth potential for the company as its June 20 announcement of its new Galaxy and ATIV products approaches. The press conference will take place in London, and analysts expect the Galaxy S4 Mini, Galaxy S4 Active, and Galaxy S4 Zoom to be announced.
(NASDAQ:GOOG) Android OS is behind the cutting-edge Galaxy devices, while ATIV’s smartphones, tablets, and PCs are backed by Microsoft Corporation’s
(NASDAQ:MSFT) Windows 8 or RT systems.
(See also: The Future of Android Looks More Like Apple Inc
While analysts will likely refrain from making any bold assessments following these new announcements, investors may be able to walk away more confident that Samsung is in a position to succeed in the ultra-competitive tech industry.
With a 29% share of the smartphone market at the end of 2012, Samsung is certainly still a major player. A more reserved outlook from analysts following tomorrow’s event could perhaps be to Samsung’s benefit. With less risk of an overreaction by analysts on the positive side, there is a reduced likelihood of opinions reversing so rapidly in the negative direction this time around.
Looking beyond the upcoming press conference, Facebook Inc’s
(NASDAQ:FB) Mark Zuckerberg met with Shin Jong Kyun, the president of Samsung, earlier in the week. With the social media site’s disappointing results following its IPO, the need to form investor-friendly partnerships could open new doors for Samsung.
(See also: Will Facebook Inc's Copycatting of Twitter's Hashtags Garner Profits or Protest?
Keep an eye on Samsung in the coming days as its sharp downturn could become a slow but steady growth period.
No positions in stocks mentioned.