Despite Samsung shipping 20 million units of the Galaxy S4 in June and the South Korean tech giant logging a 47 per cent boost in profit for the second quarter of 2012, the Seoul-based company is headed for a downgrade.

Analysts attribute the development, which affected not only Samsung but also Apple and HTC, to the saturation of the smarphone market with 50 per cent of cell phone users already owning a smartphone.

The slower sales led analysts to cut income estimates for Samsung that caused immediately a 13 per cent decline in the company's share prices. Over the weekend, Samsung shares suffered another 3.8 per cent decline to 1,267,000 won. Overall, the tech giant's share prices has gone down 17 per cent since January, more than double the 8.2 per cent decline of the Kospi.

Samsung had 57 trillion won sales in the June quarter, actually higher the 47.6 trillion won sales it logged for the same quarter in 2012.

Experts explained the slowdown in sales to the inability of the newly released high-end phone to wow buyers as their new flagships appear to be not radically different from older models and the presence of very cheap but more basic smartphone models from China priced at $100.

Neil Mawston, executive director of Strategy Analystics, commented, "Apple is suffering from iPhone fatigue, while Samsung is suffering from Galaxy fatigue."

Jeff Kim, analyst at Hyundai Securities, added that one of the biggest risk for Samsung is that 70 per cent of its total operating profit are from the mobile business, pushing for more diversification and for Samsung to engage in active business transition until the end of 2014.

HMC Investment Securities analyst Nho Geun-Chang opined that the Samsung quarterly results missed the market consensus due to the firm spending more on marketing expensed for the launch of the S4.

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