Samsung´s Profits Dive 30 Percent Amid Galaxy Note 7 Fiasco
South Korean phone maker Samsung has seen its profit fell 30 percent between July and September 2016, after the Galaxy Note 7 recalls, which failure has been so damaging to he company´s reputation that users have lost trust in it. This decline in its operating profit is the lowest in two years.
Although this might be an important setback for Samsung´s interest, it doesn't represent a surprising scenario for the company, giving the fact that the profit plunge is in concordance with a revised earning estimate studied by Samsung, just two weeks before it killed the Galaxy Note 7, which was positioned to take on Apple´s iPhone 7.
Galaxy Note 7 Damage To Samsung
According to the International Business Times, the company´s mobile division was the one who took the hardest hit in this situation, with a 98 percent decline in operating profit from a year earlier to $87.9 million. Samsung has reported that expects a recovery in its next quarter earning to a level similar to that of the fourth quarter of 2015.
The media also reported that even when the Galaxy Note 7 had a huge impact on Samsung´s economy, the company is betting big in Galaxy S7 and S7 Edge success in the market, considering that strong sales could help it make up for the Note 7 cancellation which will cost the company several billion dollars, without including the effects to the brand itself and stock woes.
A Good Plan
According to Engadget, this plan could end up being effective, considering that Samsung´s component business continues to being lucrative, with memory chips and display panels found in both its own devices and rival smartphones. In a statement, Samsung said that it will continue to "expanding sales of new flagship products...as well as regaining consumer´s confidence."
Although a failure as the Galaxy Note 7 could have destroy almost every phone maker company, Samsung still remaining one of the most powerful in the world, and it could recover with the Galaxy Note 8 next year.
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