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Best Buy Drops on Samsung S4 Delay (Update 2)

(Updated from 3:53 p.m. EDT with more views from analyst)

NEW YORK ( TheStreet) -- Sprint (S) fell in New York as the mobile-phone operator and peer T-Mobile said they must delay the introduction of Samsung's Galaxy S4 due to inventory challenges at the Korean electronics manufacturer.

Samsung in a statement said that "due to overwhelming global demand of Galaxy S4, the initial supply may be limited." The company said it expected to fulfill inventory to meet demands in the coming weeks.

Sprint slipped 0.1% to $7.09 while Best Buy (BBY - Get Report), which recently introduced Samsung kiosks, or "experience shops," at its stores, fell 1.5% to $23.77. T-Mobile's merger partner MetroPCS (PCS) rose 0.7% to $11.77.


Samsung's inventory problems are nothing more than a result of stronger-than-anticipated demand for its products, said Adam Sarhan, founder of Sarhan Capital in New York. "Samsung is a seasoned company, with a long history of bringing several very successful products to the market and is not a start-up,'' Sarhan said. "This means that they are most likely able to overcome more frequent supply chain issues that other companies face especially because the first three iterations of the Galaxy were successful."

T-Mobile had originally planned to make the Galaxy S4 available on www.T-Mobile.com on Wednesday, but due to the inventory delays, now expects online availability to begin on Monday, Apr. 29.

Sprint, one of Samsung's largest wireless carrier partners, had planned to launch this next generation of the Samsung Galaxy on Saturday, Apr. 27.


Due to the inventory challenges, Sprint expects a slight delay with its full product launch. The company expects to make the Galaxy S4 available at www.sprint.com and Telesales (1-800-SPRINT1) as planned on Saturday with Sprint retail stores and other channels receiving devices as inventory becomes available.

Samsung rival Apple (AAPL - Get Report) rose as the news spread, but closed down 0.2% to $405.46.

Sarhan said it remains to be seen whether Samsung's inventory issues will impede on growth in the current quarter and lead to criticisms of over-promising and under-delivering.

"The jury is still out because a lot determines how long these delays are and whether or not more unexpected delays show up in the future,'' Sarhan said.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

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