Samsung Electronics has slashed its quarterly profit forecast due to the scrapping of its Note 7 smartphone.<\/p>\n
The South Korean firm now expects third quarter profits of 5.2tn won ($4.7bn; \u00a33.8bn), which is a third lower than its original estimate of 7.8tn won.<\/p>\n
The Note 7 was recalled last month after battery fires, but after replacement phones experienced the same problem, Samsung scrapped the device.<\/p>\n
Ahead of the profit warning, Samsung shares fell 0.8% on Wednesday.<\/p>\n
That added to Tuesday’s 8% fall.<\/p>\n
The company has seen more than $20bn wiped off its market value in two days.<\/p>\n
<\/p>\n
Samsung’s shares have fallen on concerns that the current crisis will go beyond the costs of the recall and affect the brand’s overall reputation.<\/p>\n
Analysts are suggesting the Note 7 crisis could cost Samsung in the long run, particularly coming just as rivals, such as Google and Apple, have announced new high-end smartphones.<\/p>\n
The Note 7 had been seen as the main rival to Apple’s new iPhone 7 model. Samsung’s woes have sent Apple’s shares to a 10-month high.<\/p>\n
In September, Samsung recalled around 2.5 million phones after complaints of exploding batteries.<\/p>\n
It later insisted that all replaced devices were safe. However, that was followed by reports that those phones were catching fire too.<\/p>\n
But on Tuesday, the company said it would permanently cease production of the device and urged owners to turn it off.<\/p>\n
–<\/p>\n
Source: BBC<\/p>\n","protected":false},"excerpt":{"rendered":"
Samsung Electronics has slashed its quarterly profit forecast due to the scrapping of its Note 7 smartphone. The South Korean firm now expects third quarter profits of 5.2tn won ($4.7bn; \u00a33.8bn), which is a third lower than its original estimate of 7.8tn won. The Note 7 was recalled last month after battery fires, but after […]<\/p>\n","protected":false},"author":14,"featured_media":257690,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[106],"tags":[],"yoast_head":"\n