What Samsung lost after Galaxy Note 7 debacle

October 27, 2016 6:11 pm


* Samsung’s Q3 operating profit fell by 30 per cent KRW5.2 trillion vs. KRW7.3trn in Q32015

* Mobile operating profit tumbled 96 per cent to KRW100 billion

* Net profit fell by 16.8 per cent to KRW4.54trn

 

The world’s largest Smartphone maker, Samsung Electronics Co., said on Thursday that its operating profit in the third quarter fell by 30 per cent after the recall of its flagship Galaxy Note 7 Smartphone.

The South Korean technology major’s overall operating profit during the period between July and September was KRW5.2 trillion ($4.6 billion), down from a year ago period’s KRW7.3trn. Its mobile operating profit tumbled 96 per cent from what it was a year earlier to KRW100 billion.

The company said that stronger Korean won against major world currencies also negatively impacted operating profit in the third quarter.

Samsung’s net profit fell by 16.8 per cent to KRW4.54trn, the lowest quarterly profit in more than six years as it scrapped the premium Smartphone, which went on sale on August 19, after several reports emerged that devices were overheating and bursting into flames.

Samsung announced on October 11 that it was altogether stopping the manufacture of Galaxy Note 7, launched to compete with arch-rival Apple’s iPhone.

The phone manufacturer had said earlier this month that it was expecting that the Note 7 fiasco would cost another $3 billion-plus in lost profit over the next two quarters.

At an extraordinary shareholders meeting on the same day, Samsung’s president and co-CEO JK Shin, who used to be the company’s mobile chief until last year, apologised to investors and customers for the Note 7 catastrophe.

The damages the smartphone has done to the Samsung brand are yet to be assessed.

However, Samsung said it “will focus on expanding sales of new flagship products with differentiated design and innovative features, as well as regaining consumers’ confidence.”

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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