It was speculated that the Note7 would be one of the most expensive recalls in tech history, and it looks to be confirmed by Samsung Electronic’s Q3 results.
The manufacturer revealed a £16 billion profit within its combined IT & Mobile division for Q3, which represents an 18.1% decrease year on year. With mobiles alone accounting for a mere £71.3 million – a 96% decrease versus the same quarter last year.
Research by Canalys also reveals Samsung’s global mobile market share has decreased to 76 million units 21.5%, a reduction of 8.9% reduction year on year.
Commenting on the reduced shipments, Canalys senior analyst Tim Couling stated, ‘Halting sales of the Note 7 had an impact on Samsung’s shipments in Q3, but even a smooth launch would not have delivered year-on-year growth. With the recall commencing midway through September, it was too late in the quarter to have a positive effect on the competition.’
However, the Korean Giant’s incredibly diverse portfolio of products gave the company breathing space overall, with the global components shortage and associated price increases helping the company’s component arm showing a 8.8% increase compared to the Q2.
Overall the company posted a £3.8 billion operating profit – a 30% decrease year on year.
Samsung say they remain confident that the Note7 will not do lasting damage to their mobile arm, stating in their Q3 statement, ‘The company will strive to achieve comparable YOY earnings in the fourth quarter, helped by solid sales of the Galaxy S7 and S7 edge, while maintaining profitability in the mid-to-low end segment through increased shipments of new models.
As for 2017, the company anticipates a turnaround with the launch of new flagship smartphones. Next year will also see expansion of Samsung Pay rollouts and cloud-related services as well as the introduction of artificial intelligence related offerings.’
A rumoured iPhone shortage could be part of the continued success of the S7 and S7 edge sales, while the company hopes will help lift its lacklustre tablet sales in the UK and globally.
Meanwhile there was also movement at board level, with Lee Jae-Yong - the son of the company’s current chairman, being backed to join the board by shareholders. Jae-yong is widely seen as the heir to the Samsung family dynasty once his 74-year-old father retires.