Galaxy Note 7 Recall Worries Bank Of Korea, High-Profile Controversy To Affect Asian Powerhouse's Economy?
The Bank of Korea (BOK) explained on Thursday its worries about Samsung Electronics Co.´s smartphone crisis, asserting the fact that Galaxy Note 7 debacle will cost the company $5.3 billion. While the tech giant can easily bounce back from the financial loss, the controversy could be very harmful to the economy and the foreign exchange market.
A Serious Problem For South Korea Economy
This multi-billion dollar earnings hit from lost sales has already started to affect the Korean Won going down 1.5 percent, turning it into the worst performing currency in Asia this week. In addition to this problem, investors and analysts have predicted lost revenue in the region of $17 billion for Samsung, as reported by Reuters.
However, Samsung affirmed that the real hit to its operating profit might be about $3 billion over the next two quarters, bringing about $5.3 billion of total losses to the global tech giant. In order to cover these losses, the company will boost the production for the Galaxy S7 and S7 Edge, and could make an earlier release for the Galaxy S8, according to the International Business Times.
Samsung's Ratings Might Not Be Affected
Although this is a delicate situation that represents a serious hit to Asia´s fourth-largest economy, Bank of Korea Governor Lee Ju-Jeol explained that even if the cancellation of the Galaxy Note 7 is an undeniable issue for the South Korean economy, it is too soon to make sweeping predictions. Also, an analysis made by Standard & Poor´s Global Rating showed that Samsung rating might not be affected.
"We believe the impact on the ratings will be limited at this stage mainly because of SEC's significant net cash holdings of about $58.3 bn as of June 30, 2016, and strong operating cash flow," Standard & Poor´s Global Rating members told the IBT.
The global smartphone maker announced in early September the cancellation of 2.5 million Galaxy 7, after it was known that the phones could burst into flames. According to Reuters, the consequence of this decision was a sales hit of $2.2 billion, considering that the cost of each device was $882.
Amazon Gearing Up For Chrismas; Due To Hire 120,000 Employees In 27 States
This expansion will give more job opportunities for job-seekers.
Snapchat IPO To Be Lead By Morgan Stanley And Goldman Sachs
Snapchat will become the biggest U.S. technology company to go public, with its IPO set for next year.
Bill Gates Urges Next US President To Prioritize Long-term Innovation
Gates explained that private and public sector must work together in order to make great things happen. Health, education and climate change are his top priorities.
Samsung Screw Up Renders Galaxy S8 Way Cheaper Than It Should Have Been
Due to last year's Samsung screw up with Galaxy Note 7's battery, the recent Galaxy S8's price has been reportedly slashed. The most expensive phone ever actually has already cut down its price.
Samsung Galaxy S8 Camera Makes iPhone Users Ditch Their Devices
Both the Galaxy S8 and iPhone 7 (including their blown-up versions) have the impressive hardware for picture taking. However, it seems that even Apple's flagship users prefer the shooter that goes with Samsung's latest device.
MORE IN ITECHPOST
How to Protect Yourself on Facebook
Facebook is an application that takes on an all-encompassing role in our social media lives. It is a space where we communicate with friends and family about our personal lives, browse through an endless stream of content, and interact with other companies and entities on groups and pages.
How Do Personal Emergency Response Systems Work?
Personal emergency response systems, known as PERS for short, are systems that help people to raise the alarm and get immediate help when a medical or personal emergency occurs. They are ideal for older people and anyone with a mobility issue or an injury or illness that can cause falls.
The 9 Most Popular (And Fun) Internet Games of 2019
Are you bored of board games? What are the most popular internet games from this year? These nine are popular for a reason. Check 'em out!