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Investors Stay Sour on Samsung, Slicing $8 Billion From Market Capitalization

Wall Street Journal Original article ›

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Investors are showing concern about Samsung's earning momentum. The mobile division generates 50% of profit and competition in intensifying in this field. Samsung shares declined by 4.6% on Jan 2, 2013. Overall operating profit is expected to increase in the 4th quarter 2013 by 9.2% from prior year, compared to 26% in the 3rd quarter 2013. The operating profit for the mobile division is expected to be up 14% over prior year for 4th quarter 2013, declining 8% from the third quarter. The less premium smartphones make up a greater proportion of the portfolio reducing margins. Prices are being lowered by competitors. Motorola Mobility is cutting the price of its Moto X smartphone to $399 from $550, much cheaper than the Samsung Galaxy S4 smartphone costing $600 without a contract in the U.S. market. Declining TV prices with competition from Vizio and other Chinese competitors is likely to squeeze margins in this segment.

Comparison of profit margins for smartphones Moto G, Galaxy S4, and the iPhone 5S

12/07/2013

The Samsung Galaxy S4 and iPhone 5S parts components cost a little over $200 with the phone price set at about $640. In comparison the Google Moto G has $123 of parts components and is priced at $200. Google has about a 5% operating profit margin on the Moto G, compared to about 28% for Samsung's Galaxy S4.

Grouped Articles

Google Squeezes Margins on Moto G Phone

Wall Street Journal 12/07/2013

Investors Stay Sour on Samsung, Slicing $8 Billion From Market Capitalization

Wall Street Journal 01/02/2014

Samsung is Getting Squeezed

Wall Street Journal 01/08/2014

Google Gets While the Going is Good

Wall Street Journal 01/30/2014

Samsung performance

07/08/2010

Grouped Articles

Samsung Plans 'Rugged' Version of Galaxy S 4 Phone

Wall Street Journal 04/26/2013

Inside Samsung Phone: Samsung Parts

Wall Street Journal 05/08/2013

Samsung Profit Climbs 42% on Smartphone Sales

Wall Street Journal 05/12/2013

Samsung Could Soon Surpass Apple in Handset Profit

New York Times 05/06/2013

Samsung's Dream Is to Be No Android Sheep

Wall Street Journal 06/17/2013

Huawei Set to Launch New Smartphone

Wall Street Journal 06/18/2013

Samsung's profit margins on the Galaxy S4 and mid tiered phones

12/07/2013

Grouped Articles

Google Squeezes Margins on Moto G Phone

Wall Street Journal 12/07/2013

Investors Stay Sour on Samsung, Slicing $8 Billion From Market Capitalization

Wall Street Journal 01/02/2014

Samsung is Getting Squeezed

Wall Street Journal 01/08/2014

Lenovo-Google Deal Adds to Samsung's Smartphone Worries

Wall Street Journal 01/30/2014

Samsung Considers Its Counterattack as Rivals Erode Cellphone Profit

New York Times 07/13/2014

LG’s Snappy G3 Phone Is Poised to Test Rivals

New York Times 07/27/2014

Samsung's mobile business.

06/28/2010

Grouped Articles

Apple Faces Dilemma Over Strategy in China

Wall Street Journal 04/24/2013

Samsung Could Soon Surpass Apple in Handset Profit

New York Times 05/06/2013

Samsung Pursues Developers, Seeking Orbit of Apps

Wall Street Journal 10/28/2013

Investors Stay Sour on Samsung, Slicing $8 Billion From Market Capitalization

Wall Street Journal 01/02/2014

Smartphones Throw Samsung a Curve

Wall Street Journal 01/08/2014

Samsung: Fluffed lines

Economist 01/14/2014


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