Samsung expects to lose $5.4 billion on Galaxy Note 7

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Samsung expects to lose $5.4 billion on Galaxy Note 7

The company said it expects to generate 5.2 trillion won (£3.7 billion) in operating profit during the third quarter after the recall cost.

Samsung said in a statement that it expected the blow to profit to be in the mid-2 trillion Won range in the October-December period and about 1 trillion Won (US $900 million) for the first quarter of 2017.

In a bid to retain customers, Samsung Electronics is giving larger financial incentives to people who choose to exchange the ill-fated Galaxy Note 7 for another smartphone from the company, rather than seek a refund.

Just so you know. that's 1.9 million phones in total, including 1 million original Galaxy Note 7 units and 900,000 "replacement" Galaxy Note 7 units, both of which have suffered from reported incidents of overheating.

Samsung Electronics was now planning to standardise its mobile phone business by expanding sales of models including the Galaxy S7 and the Galaxy S7 Edge, noting it will also introduce "significant changes" to its quality checking processes to "enhance safety for consumers".

The company will also halt the selling of all Note 7 handsets in the Chinese mainland, the statement says. Samsung had already instructed owners to cease using the devices and to return them for refund or replacement with alternative devices.

Samsung cut its third-quarter operating profit by $2.3 billion on Wednesday after deciding to end production of the troubled smartphone permanently. Samsung is now counting the financial cost of the recall - but would the promise of a nice, crisp Benjamin be enough to entice you back?

"We have just received this insane Galaxy Note 7 return kit", the person said in the video.

"Suppliers must accept all returned Samsung Galaxy Note 7 devices and a full refund must be issued to the consumer". Customers who opt to exchange the Galaxy Note 7 for another Samsung smartphone will receive up to a $100 bill credit; a $25 bill credit will be applied for customers who opt for a different smartphone. There may have still been hope for the phone, but the reputation was too tarnished for Samsung to continue.

The Note 7 device was one of the most expensive smartphones in the market with all the latest technologies from Samsung, including the ability to unlock the phone by scanning a user's iris. "Once it figures out what went wrong with the Note 7, its new Galaxy S8, a more important flagship model than the Note series, can help fix the tarnished brand and recover sales/profit margin", the analyst firm added.

At this stage it is unclear why some Note 7 devices have been exploding.

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