Samsung’s Galaxy S4 dead in the water

Samsung Galaxy S4 (four-up, red, blue)

Following clickbait dead-in-the-water headlines which spelled doom for Apple on overzealous analysts projecting overly optimistic iPhone sales, it’s now Samsung’s turn to feel Wall Street’s wrath. So, is Samsung’s smartphone business running out of steam?

That’s the question Wall Street is pondering as investors punish the South Korean firm after orders for its flagship Galaxy S4 had supposedly dropped by as much as thirty percent.

Friday, Samsung shares slid by more than six percent after more than $12 billion was sliced from the Android maker’s market capitalization. Can Samsung stop the downward spiral, perhaps offering a stock buyback as Apple did? Or are we seeing only the latest signs of an industry-wide slowdown in demand?

Either way, the old saying about people living in glass houses seems all the more pertinent…

The money quote comes via The Wall Street Journal-owned MarketWatch:

The share price decline was reminiscent of the fall in Apple Inc. shares earlier this year, which was sparked by concerns over iPhone sales.

Analyst firm J.P Morgan said a thirty percent decline in Galaxy S4 orders would likely disappoint investors. Some on Wall Street expected thirty million units to be sold throughout the third quarter.

In May, Samsung announced it had sold ten million Galaxy S4 handsets into the channel during the first 28 days of availability. Note that Samsung’s quarterly earnings do not divulge smartphone sales for competitive reasons.

Although that was more sales than any previous Galaxy launch, it didn’t hold a candle to demand for Apple’s latest. Apple sold five million iPhone 5 units in three days when the device became available in September 2012.

The response to Samsung’s slump on Wall Street closely follows an early reaction when reports claimed iPhone orders were off in 2012, suggesting a slowdown in sales. Indeed, talk of an iPhone slowdown prompted a rash of ‘dead in the water’ headlines.

Apple’s falling stock was halted after the company in April beat Wall Street’s revenue estimates. But even though Apple reported its first drop in profits in ten years, investor attention concentrated more on a planned $100 million buyback and a fifteen percent boost to quarterly dividends.

Samsung has become the face of Android, leading sales for Google’s mobile operating system.

Earlier this week, Flurry said that while Android leads in sheer unit volume, Apple controls two major areas of the mobile environment: apps and profits. Consequentially, Android struggles against a fragmented market where most of the handsets have old versions of the software.

Also, owners of iPhones, Android users view apps as an after-thought. So far, Samsung is mum on how it plans to stop the bleeding – if it can.

It’s fun comparing headlines over at Business Insider:

On Apple, dated April 26, 2011: “IT’S OFFICIAL: Android Clobbering Everyone, iPhone Dead In The Water”

And then on March 14 2013: “CHART OF THE DAY: The iPhone’s Market Share Is Dead In The Water”

And today: “SAMSUNG SMASHED: $12 Billion Disappears In Market Cap As Smartphone Sales Slow”

Hey, at least ours isn’t capitalized!