Following the recall of the Galaxy Note 7 the South Korean technology giant has seen operating profits plunge by 30%. Operating profit between July and September was the lowest in two years at just £3.8 bn.
This follows the recall of the Galaxy Note 7 after receiving reports the devices were catching fire. Samsung initially replaced unsafe devices but these too started catching fire leading to the company recalling all Galaxy Note 7 smartphones. Samsung has since halted production of the device.
The company has experienced a major blow to its reputation for quality and reliability as well as its ability to compete with Apple’s iPhone.
Currently, high-end smartphone makers are struggling to encourage customers in developed markets to upgrade to newer models resulting in a slowdown in sales. Despite this, the Galaxy Note 7 had the potential to sell between 15 million and 17 million units and this opportunity has now gone. Surely a painful blow to Samsung.
Samsung's mobile unit have now said, that they will focus on expanding sales of new flagship products, as well as regaining consumers' confidence. The next high-end device , the Galaxy 8 is not expected until next year.