Samsung stock hits two-month low
Shares drop on predictions of won strength, smartphone market saturation
Samsung Electronics saw its share price drop to a two-month low on the Seoul market during Friday trading, following the company's announcement of an expected slowdown in smartphone demand, reported Bloomberg.
The smartphone maker also said that a stronger South Korean won was projected to cut its operating profit by KRW3trn ($2.8bn) this year.
Samsung stock fell 2.5%, quelling the positive news of a 76% increase in quarterly net profit, which was higher than analysts' predictions. The plunge in share price was also spurred by general concerns about the health of the smartphone market after Apple Inc finally lost its title of the world's most valuable company to Exxon.
"Fourth-quarter results were good, but the problem now is what lies ahead," said Seoul-based Taurus Investment Securities analyst Kim Hyung Sik.
"The high-end smartphone market has largely become saturated, while the fast Chinese growth in the lower segment will make it difficult for anyone to see strong profit growth there."
Recently, a number of budget smartphone models have been launched worldwide, including Nokia's Lumia 620 and new additions to China-based Huawei's Ascend range. The offerings are largely aimed at the less affluent markets where Samsung and Apple have yet to compete.
Bloomberg reported earlier this month that Apple was working on a smaller, budget iPhone, but insiders told the news network that the model would not be market ready until the furth quarter of this year.