Ever since the disastrous launch of their Galaxy Note 7 phone-tablet, and subsequent fallout, leading Korean electronics manufacturer Samsung has been in a situation close to free-fall. The wasted capital in the faulty Note 7s that caught fire while charging, the inefficient recall program, and the horror of discovering that the replacement units brought out to trade for the initial Note 7 run were just as dangerous was a serious blow to the brand’s confidence. Its political entanglements with South Korean President Park Geun-hye only served to further muddy the waters of the company’s future.
Lately Samsung has issued a public statement on the primary cause of the lamentable Note 7 meltdowns, and later news reveal that despite the massive hiccup of profit loss, the company still looks set to recover and thrive.
No-selling the Note 7
All told, Samsung ended up sinking a total of $5 billion into the entire Galaxy Note 7 and the cleanup from its aborted introduction and short life. Nevertheless, somehow the Korean giant of industry managed to finish of Q4 of 2016 with a profit of 9.2 trillion Won, or $7.9 billion according to their Tuesday January 24 quarterly report. Remarkably Samsung had upped its quarterly profit by 50% from its 2015 levels. Thus their earnings are currently at the highest they’ve ever been in three years.
It’s all thanks to the large scale of products they’ve been churning out. Samsung’s mobile communications division continued churning out the Galaxy S7 smartphone and other products, which covered for the profit hit and more so, if their report of a 12% profit increase, despite almost dipping in the red because of the aforementioned Note 7 crisis.
Speaking of which, Samsung’s publicizing of their investigations regarding the Galaxy Note 7, done Monday January 23, affirmed the theorized cause of the exploding “phablets” being in the battery packs produced by two suppliers, even outlining new precautionary measures in their manufacture and outsourcing to prevent this bungle for reoccurring.
It’s hoped that finally this announcement can put the Note 7 issue to sleep and let everyone involved move on.
Resilient brand
While Samsung is acknowledged as the largest maker of smartphones by volume, this is no longer the main profit source of the brand. In the same way that smartphones replaced home electronic appliances as Samsung’s cash cow, now the main draw is their electronics components ranging from semi-conductors to LCD display screens. There are rival smartphone manufacturers like America’s Dell and Apple, China’s Oppo, and fellow Korean super-brand LG, that use Samsung components to assemble their own products. That equates to continued profit, surely enough to prep for production of their next phone-tablet to succeed the Galaxy Note 7.
