Galaxy Note 7 was released last September hoping to be Samsung's salvation. Specially designed to attract more buyers to help the Korean electronics giant have bounce in the mobile market. Samsung is expecting a better operating profit than the same period last year.
However, Samsung's optimism turned to ashes when the company was enforced to make a worldwide recall of Galaxy Note 7 devices this month. The cause behind the recall are the faulty batteries that caused multiple phones to explode or burst into flames. The company issued a statement during mid-October saying that they would discontinue the Note 7 after the constant recall of devices due to battery heating issues.
Tremendous effects are expected especially to the public relations and businesses. Last Wednesday Samsung declared their lowest operating profit in two years' time. The company suffered nearly 30 of decline in profit which is equivalent to 5.2 trillion won or $4.5 billion.
The mobile division of Samsung who's responsible for developing the product undergo its lowest profit in eight years. Only garnering 100 billion won ($87.8 million), a plunge of about 96 percent.
"We are expecting some difficulties until the first quarter of 2017, but we will achieve a business turnaround with the release of our new flagship smartphone," said Samsung's vice president for mobile communications, Lee Kyeong-tae.
The reason behind the device' overheating allegedly remains a mystery, making delayed development for the Galaxy S8, its succeeding flagship phone.
Samsung advised that the fiasco could range mounting of $5 billion, as the consequences shouldn't come as much of a surprise. This much is to be expected after the recalls and cancellation of the Note 7.
"I apologize to the investors for the Note 7 catastrophe, engineers are carefully revisiting every aspect of the device, such as its hardware, software and manufacturing processes," said J.K. Shin, a Samsung co-chief executive and until last year the company's mobile chief, at the shareholder's meeting.
"The investigation would take time and I pledge to share the findings in an open manner," Mr. Shin added.
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