The cocaine nose jobs of Wall Street are reeling after Samsung Electronics missed already modest expectations for its quarterly earnings guidance.
The announcement seems to indicate that the smartphone business may have peaked.
Samsung's Galaxy S was pushed into the top rank of smartphone makers in 2012, overtaking Apple. Apple has not recovered and had to pull back on its expectations for coming years. Now it seems that Samsung is going the same way and that the days of high margin smartphones are waning.
Jung Sang-jin, a fund manager at Dongbu Asset Management, which owns Samsung shares, told Reuters that the growth was disappointing because of slow sales of the S4 but the company is far from doomed.
He thinks that Samsung has some exciting stuff up its sleeves. The problem is no one is sure whether these products can really wow investors and consumers.
Samsung shares fell by more than three percent and have dropped 17 percent since early June.
The fall in the share price equates to a drop in market value of $34.2 billion.
Jeff Kim, an analyst at Hyundai Securities said that Samsung Electronics needed to diversify away from the mobile business. At the moment 70 percent of total operating profit comes from mobile business.
Samsung did make $8.3 billion in operating profit forecast, up 47 percent from a year ago. It is still a record and it is expected to report higher earnings in the current and fourth quarters as sales of its latest Galaxy S4 phone pick up and new products hit the stores.
Prices of memory chips, another industry where Samsung holds the lead, are also expected to remain strong.
Samsung had expected its component business to pick up the slack in the second half when smartphones slow, but now worries are also mounting that the component business' recovery could be short lived.