Galaxy Note 7 debacle would cost Samsung nearly $3B over next two quarters

Galaxy Note 7 debacle would cost Samsung nearly $3B over next two quarters

In a statement released on Friday, Samsung Electronics said that its operating profit over the next two quarters will likely take a hit of nearly $3 billion, due to the discontinuation of the company's ill-fated Galaxy Note 7 smartphone.

Galaxy Note 7 was Samsung's latest flagship Note handset which was launched by the company in August, to pose a substantial challenge to the Apple iPhone at the high-end smartphone market. However, the Note 7 was discontinued by Samsung earlier this week, because of persistent battery-explosion issues.

Against the backdrop of the discontinuation of the Galaxy Note 7 handset, Samsung has projected that the total losses to the company because of the explosive-battery issues reported with the Note 7 will likely be $5.3 billion. Earlier, on Wednesday, Samsung had said that that its third-quarter profit will likely be hit by $2.3 billion.

In its Friday statement, Samsung said that the blow to the company's profit in the October-December 2016 quarter will probably be in the mid-2 trillion, and approximately 1 trillion won ($900 million) for the January-March 2017 quarter.

Meanwhile, about the potential impact of the failure of Galaxy Note 7 on the Samsung brand, LS Asset Management's Fund Manager Kim Sung-soo, said: "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."


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