Profit of Samsung Electronics Co. fell 16.8% in the third quarter. Now, it is vivid that Note 7 caused this collapse. Galaxy Note 7 is the premium product by Samsung Electronics Co., a subsidiary of Samsung Group.
How the profit plummeted
Samsung electronics launched its high-end Galaxy Note series in 2011. From the birth of the series, this is the first time the corporation is having the lowest profit.
During the short span of time of Note 7, dozens of reports and complaints put the whole company’s profit in a sharp drop. On August 19, the smartphone went on sale. Then, on September 2 the company decided to recall the phone since it is fire-prone. Finally, on Oct. 11 banning the phone, Samsung put an end to manufacturing the Galaxy Note 7. In fact, it issued a recall of 2.5 million devices worldwide. It was a big shock for the company and its investors.
Investors thought that launch of the Note 7 ahead of the arrival of Samsung’s long time competitor Apple’s iPhone 7 will make a way to earn more profit. But, it went completely the opposite direction.
However, the failure could be worse if it were performing badly in selling semiconductors and display panels. Though the company’s semiconductor division had a fall of 7.9%, but the display panels brought up a 9.7%. Thusly, semiconductors and display panels contributing Samsung for 84% of overall operating profit which is record high in years.