Samsung takes £4.4bn hit from Note 7
- Posted on
- Comment
The total cost of pulling Galaxy Note 7 smartphones off the market will be at least £4.4bn ($5.4bn), Samsung said.
The South Korean tech giant had already lowered its third quarter-profit guidance by £1.9bn ($2.3bn).
On Friday, it said it expected an additional hit of about 3.5 trillion won ($3bn, £2.5bn).
The Note 7 was recalled last month after battery fires, but when replacement phones experienced the same problem, Samsung scrapped the device.
The premium phone, launched in August, was meant to compete with Apple’s new iPhone 7 at the top of the smartphone market.
Despite the setback, Samsung Electronics still expects to make 5.2 trillion won (£3.7bn) in operating profit during the third quarter after the recall cost.
‘Enhance product safety’
The firm said that in order to “normalise its mobile business”, it would expand sales of its other flagship devices, such as the Galaxy S7 and S7 Edge.
“Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes,” Samsung said.
In September, the company recalled about 2.5 million Note 7 devices after complaints of overheating and exploding batteries.
It later insisted that all replaced devices were safe. However, that was followed by reports that those phones were catching fire too.
On Tuesday, the company said it would permanently cease production of the device and urged owners to turn it off.
-BBC
ABOUT: Nana Kwesi Coomson
[email protected] An Entrepreneur, Corporate Social Responsibility, Corporate Communications Executive and Philanthropist. Editor-in-Chief of www.233times.com. A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. His first degree is in Bachelor of Arts - Political Science (major) and History (minor) from the University of Ghana. He holds MSc in Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) from the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow who studied at Clark Atlanta University in USA on the Business and Entrepreneurship track.
View all posts by: Nana Kwesi Coomson
(Selorm) | 
(Nana Kwesi)