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Samsung takes £4.4bn hit to profits from Note 7 fallout | |
(35 minutes later) | |
The total cost of pulling Galaxy Note 7 smartphones off the market will be at least £4.4bn ($5.4bn), Samsung said. | |
The South Korean tech giant had already lowered its third-quarter profit guidance by £1.9bn ($2.3bn). | |
On Friday, it said it expected an additional hit of about 3.5 trillion won ($3bn, £2.5bn). | |
The Note 7 was recalled last month after battery fires, but when replacement phones experienced the same problem, Samsung scrapped the device. | The Note 7 was recalled last month after battery fires, but when replacement phones experienced the same problem, Samsung scrapped the device. |
The premium phone, launched in August, was meant to compete with Apple's new iPhone 7 at the top of the smartphone market. | |
Despite the setback, Samsung Electronics still expects to make 5.2 trillion won (£3.7bn) in operating profit during the third quarter after the recall cost. | |
Samsung cuts profit forecast | Samsung cuts profit forecast |
Samsung: More than a smartphone fire row | Samsung: More than a smartphone fire row |
Samsung Note 7 flames out: Experts react | Samsung Note 7 flames out: Experts react |
Timeline: Samsung's Note 7 woes | Timeline: Samsung's Note 7 woes |
Rory Cellan-Jones: Samsung's burning issue | Rory Cellan-Jones: Samsung's burning issue |
'Enhance product safety' | 'Enhance product safety' |
The firm said that in order to "normalise its mobile business", it would expand sales of its other flagship devices, such as the Galaxy S7 and S7 Edge. | The firm said that in order to "normalise its mobile business", it would expand sales of its other flagship devices, such as the Galaxy S7 and S7 Edge. |
"Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes," Samsung said. | "Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes," Samsung said. |
In September, the company recalled about 2.5 million Note 7 devices after complaints of overheating and exploding batteries. | In September, the company recalled about 2.5 million Note 7 devices after complaints of overheating and exploding batteries. |
It later insisted that all replaced devices were safe. However, that was followed by reports that those phones were catching fire too. | It later insisted that all replaced devices were safe. However, that was followed by reports that those phones were catching fire too. |
On Tuesday, the company said it would permanently cease production of the device and urged owners to turn it off. | On Tuesday, the company said it would permanently cease production of the device and urged owners to turn it off. |