Samsung, South Korea’s biggest business conglomerate or chaebol released these numbers via statement. The profit loss according to Reuters will be, “mid-3 trillion won over the next two quarters - in the mid-2 trillion won range in the October-December period and about 1 trillion won ($900 million) for the first quarter of 2017.”
It’s an unexpected bump in its soaring profits. The company earned 7.2 billion dollars in Q2 and mobile profits made the biggest contribution growing by 57 percent.
This Note 7 was meant to be the arch rival set to fight the iPhone 7 and iPhone 7 Plus at the premium end of smartphones. The biggest damage will however not come in the estimated profit loss but in the unpredictable, unquantifiable damage to the brand image itself. Reuters quotes a fund manager with an asset management firm which owns Samsung Electronics shares, "The sales impact on other models remains unclear,…"The end of the premium model will damage Samsung's brand, and hurt demand for its other models. It is difficult to measure such impact."
For now though Samsung shares have depreciated. They fell by about 8 percent this past week.
The phone giant will look to circumvent the damage done to sales by increasing sales of Galaxy S7 and S7 edge while making crucial changes to quality assurance processes to ensure debacles like releasing gadgets that burst into flames due to overheating won’t happen in the future.
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
