Share prices of South Korean tech giant Samsung slipped more than 6 per cent on Friday over the slow sales of the Galaxy S4 smartphone, its flagship.

The brokerage downgrades that followed resulted in Samsung losing $12 billion in market value. It is the biggest downgrade for Samsung in nine months.

Since the launch of the S4 in the U.S. in later April, analysts observed that sales for the device's high-end version slowed down and lagging behind expectations, while sales of low- to mid-priced units are selling fast globally.

Woori Securities downgraded Samsung last week and cut the tech giant's price target to 2 million won by 4.8 per cent because of the weakening profit growth for the Seoul-based company's mobile business which generates 70 per cent of the group's total earnings. Woori also reduced forecasts of 2013 and 2014 earnings per share by 9.2 per cent and 11.7 per cent, respectively.

JPMorgan also reduced earnings estimated after it observed 20 to 30 per cent cut in monthly orders for the S4 to 7 to 8 million units from July due to weak demand for the newly released flagship in Europe and South Korea.

Meanwhile, rating agency Fitch said it would not upgrade Samsung's A+ rating for the medium terms. Fitch explained that the South Korean tech giant relies too heavily on the consumer electronics market, specifically cellphones, which is a fickle market.

"Samsung has yet to prove its creative innovation, that is, launching a product or a market segment that has not existed before in addition to proves in manufacturing technology," Reuters quoted Fitch.

The rumoured release of an affordable iPhone could also affect Samsung sales in the low- to mid-range priced smartphones, even as overall sales of such devices had slowed down in major markets such as the U.S. since 56 per cent of Americans already have a smartphone.

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