Samsung said that that it will take a hit to its operating profit of about $3 billion over the next two quarters. The outlook brings to about $5.3 billion the total losses the global smartphone leader has forecast as a result of the overheating issues.
Samsung shares, which have fallen about eight percent this week, edged up 0.6 percent as people realised that the cost to Samsung was not going to be as high as expected. Park Jung-hoon, a fund manager at HDC Asset Management, which owns shares in Samsung affiliates, said that although future losses would not be as bad as the third quarter the company had to work hard to rebuild confidence.
“What’s important is whether the flagship S7 can fill the gap left by the Note 7, and how much trust Samsung can regain from consumers by the time the S8 comes out,” he said. Analysts expect the S8 to be released in the first quarter.
To make up for the lost revenue, Samsung said it would expand sales of gadgets like the Galaxy S7 and S7 edge phones, and make “significant changes” in its quality assurance processes to improve product safety.
The Tame Apple Press is now widening its net to include other Samsung products and imply that they might suffer as a result of the Note 7. There have already been some stories implying that Samsung’s appliances might also suffer, which is rather over egging the pudding.
Samsung posted earnings of $7.2 billion in the second quarter, with mobile profits – its biggest earner – soaring 57 percent.
The Tame Apple Press had been hoping that Samsung users would defect to the god awful iPhone 7. So far that does not appear to be happening. Samsung is offering financial packages for those who stay with the Samsung brand. Samsung users are more likely to move to other Android brands before thinking of Apple.