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Samsung is expecting Huge profit despite Note 7 Mess


Samsung Galaxy Note 7 in someone's handLess than four months ago, Samsung needed to issue a recall for every Note 7 smartphone ever bought and it was a bit embarrassing. The reason is already common knowledge: the phones were catching fire and many of them provoked injuries and cancelled flights, among other things. Now, it seems like the company left the past behind and it is focusing on the future. On Friday, Samsung Electronics announced that their profit has grown year-on-year with almost 50 per cent.

What analysts are saying

According to some analysts, the majority of the company’s profit will most likely come from the selling of memory chips or display panels. So, weirdly enough, not from smartphones. They are also saying that it was very lucky for Samsung that it all happened like this because had it not, things could have gotten really ugly. Especially after many people’s opinion about them changed after the Note 7 disaster.

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In their Friday earning guidance, Samsung stated that they expect their profit to be around $7.6 billion. This means that it will be up quite a bit from the same quarter of last year. Revenue is expected to be almost the same as last year’s quarter. If this earning guidance is to be believed, it looks like Samsung’s post Note 7 trauma was only temporary and not as serious as some might have expected. Of course, the Note 7 issue did affect the company, but more in what concerns their image, not their profit.

The users’ opinion

As for what users think right now about Samsung, it is still unclear. The South Korean company was hit hard in its ego and its reputation could have been at stake on many occasions. Let’s remember that the lithium-ion batteries of the Galaxy Note 7 smartphones were overheating while charging and some of them were even exploding or catching fire. The problem is that even now, Samsung still has not discovered the exact cause of these problems. Experts are saying that the company really needs to shed some light on this matter and quickly. They do not need to cover it and hope that people would forget because they will not. And it might affect future sales of the company.

However, Samsung ‘s main rival Apple seems to be the more profitable one as for now. At least in the smartphone business. The main cause of this situation is that Apple does not have a low-end product whereas Samsung does. And where there are low-end products there is stiff competition. And a lot of it. A research firm says that in the third quarter, it was Apple who obtained profits of $9.4 billion. This means 91 per cent of all the operating profits in the world. Apart from Samsung, there were some other smartphone companies on the list like Huawei, Vivo and Oppo.

All in all, it seems like Samsung is still not finished, as some might have predicted. On the contrary, things are looking just fine for the South Korean giant. Considering that they will soon reveal their new Galaxy S8 model, it might all spiral up from here.

Image source: here


About Donna Griggs

Donna.Griggs@thenextdigit.com'

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