Samsung stock was down 4 percent in South Korea this morning. The company is selling huge numbers of smartphones and its profits are up 47 percent. Not good enough, say investors.
Operating profit at Samsung soared to$8.3 billion in the second quarter. The previous quarter, it sold 30 million more smartphones than Apple. And now the but: Samsung’s new, hyped Galaxy S4 smartphone didn’t sell the way many expected.
Michael Levin, with Consumer Intelligence Research Partners, describes analyst expectations this way:
“Given that there’s been essentially radio silence from Apple over the past several quarters on product launch,” Levin says, “maybe Samsung could sort of charge into the void.”
In fact, both Samsung and Apple are falling from the same tree, as far as stock prices. Apple is down 21 percent this year, Samsung is minus 17. The big challenge for both is that the rich country market is already mature, most of us now own a smartphone.
“We’re seeing a shift in the smartphone market from the high end to the low end,” says Neil Mawston at Strategy Analytics. “And the industry now is selling more volumes but at lower price points.”
Which means skinnier profits, per phone.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.