Despite Galaxy 7 recall, Samsung Still Expects $3B Profit Hit
Shares in Samsung have fallen about 8% this week on news of the withdrawal of the Note 7, edged up 0.8% in early trade. However, despite these recent reported failures, Samsung still expects to take a hit to its operating profit of about $3 billion over the next two quarters due to the discontinuation of its fire-prone Galaxy Note 7 smartphone, claimed Friday.
The South Korea-based company expected the blow to profit to be in the mid-2 trillion won range in the October-December period and about $900 million for the first quarter of 2017.
The outlook brings to more than $5 billion the total losses the global smartphone leader has forecast as a result of the overheating issues, after it said on Wednesday it would suffer a $2.3 billion hit to third-quarter profit.
The premium device that was meant to compete with Apple's latest iPhones at the top end of the smartphone market had to be scrapped earlier this week less than two months after its launch.
To make up for the lost revenue, Samsung said it would expand sales of products such as the Galaxy S7 and S7 edge phones.
"Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes," the firm said in a statement.
Samsung's attempts to minimise the global fallout from the Galaxy Note 7 release has reached a new level as the company tries to get users to ditch their devices. The company is now offering customers who bought the Galaxy Note 7 in the US up to $100 off if they switch to another Samsung phone.
Samsung says that this is, "a token of our appreciation and acknowledgement of your inconvenience." The offer is only available in the United States for now, but there's no news yet if it will be spreading to other markets yet.