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Investors Give Samsung Galaxy S4 a Thumbs Down

People interact with the Samsung Galaxy S IV, March 14, 2013 in New York City.
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People interact with the Samsung Galaxy S IV, March 14, 2013 in New York City.

While Samsung Electronics' latest iPhone challenger, the Galaxy S4 with its range of gimmicky features including motion tracking technology, was the talk of the day, investors sold off shares of the company on Friday following the launch of the highly-awaited gadget.

Shares of the world's largest smartphone maker declined 2.6 percent to 1.48 million won ($1,334) in Seoul, but analysts were not worried saying the market had already priced in the hype and a similar movement in the company's shares followed the launch of the Galaxy S3 last year, as well.

(Read More: Samsung Takes on Apple With New Galaxy S4)

"This is selling on the news as most of the features were already highly anticipated. There wasn't much positive surprise. Most of it was leaked already - the screen size, processor, smart pause and eye scrolling - a few days ago," said Mark Newman, an analyst at Stanford Bernstein.

The Galaxy S4 sports a 5-inch screen, compared to the iPhone 5's 4-inch screen, and offers functions including 'Smart Scroll,' which enables users to scroll without touching the screen. It tracks the users' face to tell where they are looking.

The stock has had a positive run over the past one month in anticipation of the new product, and Friday's selloff could just be profit taking, said analysts.

(Read More: New Samsung Galaxy Phone Won't Be a Game Changer: Pros)

Samsung's stock has risen 11 percent over the past six months compared to rival Apple's share price that has fallen 37 percent over the same period.

Ron Suh, equity research associate at Macquarie, said that the "selloff will be short-lived and the shares should bounce back up."

He added that his 12-month target for Samsung's stock price to hit 2.3 million won remains in place, which is an upside of 55 percent from current levels.

Another reason why analysts are not concerned about the dip in the share price is because expectations for sales of the new smartphone are running high. Macquarie, for example, is forecasting Galaxy S4 sales to average 20 million per quarter in 2013, compared to around 15 million for the Galaxy S3 last quarter.

(Read More: For China Mobile, 4G and Next iPhone are Key to Unlocking Apple Demand)

Tech experts believe Samsung's latest offering, which will go on sale in April, will offer fierce competition for rival Apple.

"You can argue the S3 has already done some damage to Apple, it was a very successful device, and the S4 is probably going to follow in its steps," said Van L. Baker, research vice president, mobility at Gartner.

Market research firm IDC on Friday said that Galaxy S4 has the potential to outsell the next generation of iPhone, Dow Jones reported.

With the Apple's iPhone 5S expected to launch in June or July, Samsung will also enjoy an exclusive period of several months with minimal competition in the high-end segment, IDC said.

Samsung's global smartphone market share stood at 35 percent in the third quarter of 2012, double that of Apple's at 17 percent.

By CNBC's Ansuya Harjani

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