Analysts are starting to admit they had misty optics when they were optimistic over Samsung’s chances in the smartphone market.
Despite the fact they had data on their desks which suggested that the smartphone market was saturated, they believed Samsung spinners that the S4, Samsung’s latest Galaxy smartphone, would do really well.
According to Reuters, the spinners persuaded some analysts to downplay industry data pointing to a fast-saturating segment, a reality that is already eating into sales of Apple iPhone 5.
Now they appear to have started waking up from the hang-over and are muttering things like “did I really say that, I must have been stoned”.
Woori Investment & Securities, one of South Korea’s largest securities firms, cut its outlook for Samsung’s earnings and target share price on June 5. But it was only the first.
JPMorgan, Morgan Stanley and Goldmine Sex took a harder look at their assumptions of how well the S4, Samsung’s latest Galaxy smartphone, would do and decided that they needed to quit drinking.
In the last week, sales estimates for the S4 were slashed by as much as 30 percent. Of course this had a knock on effect on shareholders who are now voicing concerns over Samsung’s mobile devices division.
Samsung lost nearly $20 billion in market value in a week as shares plunged following the downgrades.
Byun Hanjoon, an analyst at KB Investment & Securities sheepishly told Reuters that most forecasters had this conviction that they’ll outperform again – because it’s Samsung.
To be fair, the S4 sold 10 million sets in just one month of its debut in late April, outperforming its predecessor, the S3. But the high-end smartphone segment is slowing, with lacklustre prospects in Europe and South Korea.
None of the phones, including the S4, have any wow factor or any compelling reason to buy.