Samsung shares drop to 2-year low as profit estimates declined

Bloomberg BusinessWeek is reporting that the share prices of Samsung Electronics have dropped 2.3 percent to 1,161,000 won in Seoul Trading, wiping off $30 billion from its market value. Samsung currently ships one out of every four smartphones in the world and this would be its lowest price since past 2 years. Samsung has been facing some stiff competition from local smartphone brands from India and China which are considered to be the largest mobile phone markets in the world. During the second quarter of 2014, Micromax overtook Samsung's market share in India while Xiaomi overtook Samsung as the largest smartphone brand in China. Now, Apple has reported that it managed to sell over 10 million iPhone 6 and iPhone 6 Plus since its release in the last week.

Samsung posted an operating profit of 7.19 trillion won in the second quarter of 2014, which was its lowest in two years. Now, Bloomberg reports that analysts have estimated that Samsung might be able to post an operating profit of about 6.50 trillion won ($6.2 billion) in the third quarter as it increased the marketing efforts to save its market share.

“Its smartphones have lost appeal — as evidenced by the solid performances of high-end Chinese models and unexpectedly strong iPhone 6 pre-orders,” Samsung Securities Co. said yesterday. Samsung, in the past month, has introduced three new metal-clad high-end smartphones in the form of the Galaxy Alpha, the Galaxy Note 4, and the Galaxy Note Edge which are expected to increase its market share but only time will tell how consumers react to these new smartphones.

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