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Samsung sheds $8bn off its market valuation; investors worry that its growth is coming to an end

Posted: , by Chris P.

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Samsung sheds $8bn off its market valuation; investors worry that its growth is coming to an end
Samsung's first day of the new year on the stock exchange is unlikely to have been as glorious as the top execs had hoped for when celebrating 2014 – the company shed about 4.6% off its market valuation after a poor start in the morning that set the tone for the entire trading day. That's the equivalent of $8 billion.

Now, while finances are a bit remote of an area from our usual field of expertise, industry watchers do have a few things to say about why Samsung isn't doing quite so well. First and perhaps foremost, the higher-end niche of the market has reached saturation – an argument we've seen being brought up repeatedly throughout 2013. This obviously means that the South Korean company simply no longer has access to as vast a pool of potential adopters of its more premium offerings, the ones that usually carry the highest margins. Along the same lines is the argument that price competition from the now many rivals worldwide is putting more and more pressure on Sammy. One could even see how said pressure has been enough to force the Seoul-based company to follow suit, as its vast brand cache gets at least partially disarmed when confronted with customers that are simply looking for the greatest deal available. This is especially true in regions with easy access to the Nexus line of devices, and now the Motorola Moto X and Moto G, all of which offer an arguably equal, even higher bang for your buck, unless you're completely sold on a particular Samsung phone or feature. It's therefore not too surprising to see that at least some people are worrying over their investment. Despite this rather gloomy-sounding analysts' repertoire, Q1 is actually shaping up to be quite a product-rich quarter for Samsung, with as many as four new tablets expected to see the light of day, and perhaps even the next-in-line Galaxy S5 and a new, less costly version of the Galaxy Note 3.

via: TechCrunch, Reuters

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posted on 02 Jan 2014, 07:36 3

1. shahulvm (Posts: 116; Member since: 01 Apr 2012)


Good...For once, we shall see less flooding of the same devices with different names...

All that goes up, must come down...They reaped the consumers when they got their chance..

For heaven sake, concentrate your R&D on giving the consumers better battery life with lesser profits..

posted on 02 Jan 2014, 07:50 11

4. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


Their quality control department needs more concentration than anything.

posted on 02 Jan 2014, 13:03

30. Astoni (Posts: 504; Member since: 28 Sep 2013)


For once i can agree with you :p

posted on 03 Jan 2014, 02:06

38. Doakie (Posts: 1251; Member since: 06 May 2009)


I know I'm jinxing myself and I'll probably have a failure as soon as I hit "POST REPLY" but my Note 3 hasn't had any problems. What was the last Samsung device you have owned?

posted on 03 Jan 2014, 05:53

39. Astoni (Posts: 504; Member since: 28 Sep 2013)


Galaxy s3 :p, i loved it tbh. but i was mostly talking about the lower end sh*t they make..,
Mxyzptlk is a i(shee)(p).. i bet he havent even touched a samsung device..

posted on 02 Jan 2014, 11:09 1

22. Extradite (banned) (Posts: 316; Member since: 30 Dec 2013)


Well the problem is the battery does not need a revolution, what they should've done is make the device weight more to 200Grms, with 4000Mah battery. I personally wouldn't mind the weight as long as it's heavy and not thick.

Surely they did, gone are the days when Samsung were making quality metal, aluminuim phones:

F700
P300
Omnia
Blackjack
810 Steel
X830
D800

Those were quality. Know they just make devices with cheap lastic.
The 90s 80s 2000 were the days when everything a company use to make was built very well and used quality materials.

Look at
Sony
Jvc
Philips
Sharp
Panasonic
Audiolab
Marantz
Nakamiki
Technics
Kenwood
Onkyo
Denon
And so many others.....

posted on 02 Jan 2014, 19:36

37. giani (Posts: 269; Member since: 13 Nov 2012)


samsung HQ R&D Department : "ok boys...in the past we've spend 2 billion to find different names for plastic. We had polycarbonate... this year we have faux leather....we need to find something for next year...GET TO WORK !

posted on 02 Jan 2014, 07:39 3

2. sri_tech (Posts: 188; Member since: 21 May 2013)


Nothing lasts forever.

posted on 02 Jan 2014, 11:13 2

24. ihavenoname (Posts: 1377; Member since: 18 Aug 2013)


Samsung will be fine. They dominate mobile market, and they have reasonably good loyalty. And Samsung makes TVs, Digiboxes, Washing machines, even Cars, almost everything which has something to do electricity, so they will be more than fine. Nokia made only smartphones, that's why they fell down. Same might happen to HTC.

posted on 02 Jan 2014, 13:16

31. Sauce (unregistered)


I agree with the man whom has no name.

posted on 02 Jan 2014, 13:38

32. Extradite (banned) (Posts: 316; Member since: 30 Dec 2013)


And so do i. Well said.

posted on 02 Jan 2014, 15:00

35. applesucker (Posts: 81; Member since: 29 Oct 2013)


they even make military weapons and hardware and also frigates, destroyers and cruisers for the south korean military

posted on 02 Jan 2014, 07:49 8

3. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


That's what happens when you oversaturate the market with device after device with the same name.

Knock Apple all you want, but keeping their product small yet diverse has allowed them to avoid saturation. HTC made the same mistake and look where it got them.

Keep the galaxy s line along with the note series and stop releasing so many variations of the same plasticky phone.

posted on 02 Jan 2014, 08:01 6

5. AntiFanBoyz (Posts: 89; Member since: 30 Nov 2013)


Riiight... that explains everything!!! I mean, thats why Apple lost over 40% from Sept '12 to May '13, right??? You're seriously pathetic in your bias. In tech a 5% swing in stock is nothing. Heck, +/- 10% swings aren't uncommon. Get back to me when they're down the 40% Apple dropped.

posted on 02 Jan 2014, 08:21 4

8. xperiaDROID (Posts: 5404; Member since: 08 Mar 2013)


Don't waste your time on this fruity fanboy. No matter what Apple do, this fruity fanboy will agree with Apple and think Apple is right.

posted on 02 Jan 2014, 08:31 7

9. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


So says the guy with droid in his user name. Maybe you should actually read my comment first before jumping to insults.

posted on 02 Jan 2014, 08:58 2

12. xperiaDROID (Posts: 5404; Member since: 08 Mar 2013)


Says the fruity fanboy who praises Apple every time. Maybe you should look at what you posted all along, blind fanboy comments from Mr. Mxyzptlk everywhere.

posted on 02 Jan 2014, 11:56 2

28. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


Why don't you come up with some new material and better comebacks.

posted on 02 Jan 2014, 12:43 1

29. Extradite (banned) (Posts: 316; Member since: 30 Dec 2013)


What's wrong with you today Mxzy...?
You never hardly post good post like this...? Normally biased when you post.

ExperiaDroid Mxzy is totally right, give him credit where it's due. He was not biased. Read his posts again. Beside the point we all know Mxzy loves Apple, but sometimes he's normal and not biased. Normally you would see him on Moto articles, hating, not trolling on it. I hardly and never agree to his posts, but surely he got 6 thumbs up.

Look what happened to Darkkjedii a year ago he use to not like Android, and use to troll and see him get "Limited" but PhoneArena turned him into a techy, cause he was fed up with getting sent away for 7days vacation. So he stopet trolling.

Mxzy deserves a credit and he said it wisely

posted on 02 Jan 2014, 19:33 2

36. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


I'm being my normal self. +1. I see Xperia ran away after he dug a hole for himself and couldn't climb out of it.

posted on 02 Jan 2014, 08:34 7

10. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


Apple reached a high point with their stock. Take an economics class and learn something for once.

For Samsung this is a forewarning for things to come. I'll break it down so you can understand it.

HTC stock fell. HTC started having problems. HTC made too many phones and now HTC is bleeding money.

Samsung is treading their footsteps.

Checkmate.

posted on 02 Jan 2014, 09:00 2

13. xperiaDROID (Posts: 5404; Member since: 08 Mar 2013)


Checkmate? lol
You're DENIED.

posted on 02 Jan 2014, 11:14

25. ihavenoname (Posts: 1377; Member since: 18 Aug 2013)


Mxy, unlike HTC, Samsung has other businesses than smartphones...

posted on 02 Jan 2014, 09:06 3

15. AntiFanBoyz (Posts: 89; Member since: 30 Nov 2013)


Dumbest comment of the year, but you're lucky... the year is young.

This isn't about economics, it's about logic vs asinine "I'm so smart" predictions about virtually meaningless data.

I'll break it down so you can understand it.

Apple stock fell. Apple is doing just fine. Apple will go on.

Samsung is treading their footsteps.

See what I did there. I made the completely opposite argument of you using the exact same level of logic.

posted on 02 Jan 2014, 09:30

17. oister85 (Posts: 396; Member since: 27 Apr 2012)


Htc is the one who follow Samsung steps. Samsung is been floating the market seems they are alive.

posted on 02 Jan 2014, 11:16

26. Extradite (banned) (Posts: 316; Member since: 30 Dec 2013)


That's right. They never had a Emblem of a device, like Apples:
iPhone 1,2,3,4,5

Samsung Galaxy 1,2,3,4
Note 1,2,3

Sony finally have there Experia, and Z series

LG finally following SS, Apple, with numbers.

So stop the diffrent name, and focus on one name brand, so as time, months years pass by, there will be a recognition.....

posted on 02 Jan 2014, 11:38 2

27. HASHTAG (unregistered)


I usually disagree with everything Mxyzptlk says, but he's actually spot on with his original post.

posted on 02 Jan 2014, 13:59

34. xfire99 (Posts: 504; Member since: 14 Mar 2012)


HTC fell is coz Samsung arise, not that they are releasing too many models and if Samsung is taking after HTC, isnt Apple the doing same thing?

Before Apple had only 2 versions of iphone, normal and then S, also only 1 Ipad version and now, they are also following HTC footsteps. Iphone 5/C/S, Ipad/mini, all with WiFi/LTE and dont talk about 8/16/32/64/128GB. That is the heck alot of different versions too too sort out.

Just as others said, Samsung isnt only in smartphone business and thanks too android, they are dominating this too.
Unlike HTC&Apple, that are relying on smartphones/tablets sales and Samsung can survive even with dropped sales in mobile devices.

Samsung:
- Worlds largest television manufacturer.
- Worlds largest of mobile phones and smartphones.
- Major manufacturer of electronic components such as lithium-ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as Apple, Sony, HTC and Nokia.

HTC&Apple is just a small company compared to multinational company Samsung.

But I dont like that Samsung are dominating in too much areas and without competitions. They can set whatever prices they want and do whatever they want.

posted on 02 Jan 2014, 09:49 1

18. fanboy1974 (Posts: 1195; Member since: 12 Nov 2011)


How is not having more products like a larger phone/phablet helping Apple? Or what about the ipod touch still on the market for $200 when you can get a Verizon Moto G for $99? Samsung got powerful because of Apple's unwillingness to adjust. Same can be said about other Android oem's but at least their turning things around. Samsung is not losing sales to Apple, their losing sales to other Android oem's such as Motorola, LG, Asus and HTC. Got to figure that even the Nexus phones and tablets are stealing Samsung's customers as well.
Don't think for second that Samsung's growth issues is because Apple has only a few models. Its because better Android products are in the market. Last time I checked Apple is still losing phone and tablet market share.

posted on 02 Jan 2014, 11:10 1

23. Extradite (banned) (Posts: 316; Member since: 30 Dec 2013)


I never agree with Mxzy, but this post +1

posted on 02 Jan 2014, 08:08 4

6. tedkord (Posts: 4736; Member since: 17 Jun 2009)


That means their market cap is 168 billion. I think they'll survive.

posted on 02 Jan 2014, 08:39 1

11. Mxyzptlk (limited) (Posts: 3510; Member since: 21 Apr 2012)


They can survive if they make the right choice and avoid a few yet critical mistakes.

posted on 02 Jan 2014, 10:21 4

20. tedkord (Posts: 4736; Member since: 17 Jun 2009)


What an incredibly broad, general statement that can be applied to any business.

posted on 02 Jan 2014, 08:12 1

7. itsdeepak4u2000 (Posts: 2625; Member since: 03 Nov 2012)


What goes next then?

posted on 02 Jan 2014, 09:04 1

14. tenho1982 (Posts: 58; Member since: 29 Dec 2013)


Samsung is killed by Google, and Google really has money to waste and kill by offering products of lower prices than they are worth.

posted on 02 Jan 2014, 10:06

19. loveHEAVYMETAL (unregistered)


samsung should not alive in mobile space,they just make gimmick feature,better hardware , nothing special at all
samsung should back to Su-dong (now Ingyo-dong) for produce and sell its own noodle

"History

1938 to 1970

The headquarters of Samsung Sanghoes in Daegu in the late 1930s
In 1938,[15] Lee Byung-chull (1910–1987) of a large landowning family in the Uiryeong county came to the nearby Daegu city and founded Samsung Sanghoe (삼성상회, 三星商會), a small trading company with forty employees located in Su-dong (now Ingyo-dong). It dealt in groceries produced in and around the city and produced its own noodles. The company prospered and Lee moved its head office to Seoul in 1947. When the Korean War broke out, however, he was forced to leave Seoul and started a sugar refinery in Busan named Cheil Jedang. After the war, in 1954, Lee founded Cheil Mojik and built the plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on the aspect of a major company.
Samsung diversified into many areas and Lee sought to help establish Samsung as an industry leader in a wide range of enterprises, moving into businesses such as insurance, securities, and retail. President Park Chung Hee placed great importance on industrialization, and focused his economic development strategy on a handful of large domestic conglomerates, protecting them from competition and assisting them financially.[16]
In 1947, Cho Hong-jai (the Hyosung group’s founder) jointly invested in a new company called Samsung Mulsan Gongsa (삼성물산공사), or the Samsung Trading Corporation, with the Samsung Group founder Lee Byung-chull. The trading firm grew to become the present-day Samsung C&T Corporation. But after some years Cho and Lee separated due to differences in management between them. He wanted to get up to a 30% group share. After settlement, Samsung Group was separated into Samsung Group and Hyosung Group, Hankook Tire, and others.[17][18]
In the late 1960s, Samsung Group entered into the electronics industry. It formed several electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the facility in Suwon. Its first product was a black-and-white television set. "
-source from wikipedia

posted on 02 Jan 2014, 13:56

33. Sauce (unregistered)


LOL your noodle comment was too funny. Thanks for the laugh x'D

posted on 02 Jan 2014, 09:11 1

16. jellmoo (Posts: 666; Member since: 31 Oct 2011)


There isn't a breakdown of how much of this should be attributed to its mobile division though. Samsung is a very large company that has quite a few different divisions. The Reuters source article seems to indicate that a stronger Won and lower margins on OLED parts.

I'm no Samsung fan or apologist, but I think that we are missing an awful lot of details if we want to proclaim that the sky is falling in the land of Samsung Mobile.

posted on 02 Jan 2014, 10:30 2

21. jpd514 (Posts: 35; Member since: 08 Nov 2013)


Diversification is what will permit to Samsung of not being affected by this situation.

In the mobile world, their R&D is already paying. Look at all the new line of product they will be announcing in the next 2 months.

posted on 04 Jan 2014, 16:01

40. johnnythai (Posts: 2; Member since: 04 Jan 2014)


samsung products are expensive compared to competitors, everything from tv's to hard drives to tablets. probably cell phones are the only exception. now seems like they are creating "pro" and low end lines of products. Unfortunately, i don't want the low end or the ultra expensive "pro" products. Give me the upper-middle-but-before-pro-and-definitely-not-low​-end. If wanting pro, will overpay apple.

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