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Samsung has made it official today that the company expects to lose over $3 billion (3.5 trillion WON) during the remainder of this year and the first quarter of the next. However, the South Korean electronics giant is hopeful that it will get back on its feet from the second quarter of 2017. As you can guess, that expectation is largely based on the success of the Galaxy S8, which will be released around that time.

Q4 2016 alone is estimated to cost Samsung a whopping $2.2 billion dollars in losses. Things will brighten up a bit in Q1 2017, as Samsung will expectedly see a less daunting drop in profits with a loss of $800 million. Now that the Note 7 is gone for good, they will be manufacturing and marketing the S7 and S7 Edge with renewed vigor to make up for at least some of the losses.

What remains to be seen is how much the Note 7 incident will affect the Samsung name as a trusted brand. To focus on this point in particular, it was stated at the end of the report that the company will prioritize, "enhancing product safety for consumers by making significant changes in its quality assurance processes."

Saikat Kar (tech-enthusiast)

In what was the worst quarter for Samsung Mobiles in the last two years, the tech giant has experienced a decrease of 96% in operating profits in Q3 2016, as compared to Q3 2015. It doesn't take a genius to guess that the recalling (twice) of the Galaxy Note 7 and its subsequent discontinuation due to mysterious hazardous threats that it posed to the customers are the main culprits behind such a disastrous financial quarter. That being said, Samsung is still the number one smartphone manufacturer in the world and significantly ahead of Apple, with a market share of twenty percent in the quarter!

According to Melissa Chau of IDC, "Samsung's market dominance in the third quarter was unchallenged in the short term even with this high-profile Galaxy Note 7 recall, but the longer term impact on the Samsung brand remains to be seen."

"If the first recall was a stumble for Samsung, the second recall of replacement devices face-planted the Note series. In a market that is otherwise maturing, Christmas has come early for vendors looking to capitalize with large-screened flagship alternatives like the Apple iPhone 7 Plus and Google Pixel."

According to IDC, 72 million of the 363 million smartphones sold in this quarter were manufactured by Samsung. The report from Strategy Analytics differs slightly (75 million out of 375 million handsets sold) but still clearly depicts the strong presence of Samsung in the global smartphone business, in spite of the embarrassing episode with the Galaxy Note 7.

Saikat Kar (tech-enthusiast)

Everyone knows what happened with the Galaxy Note 7 and that knowledge had led experts to believe that the disaster would cost Samsung a huge sum of money; somewhere close to the figure of $17 billion to be precise. Strangely enough, the results seem to disagree.

According to the Korean tech giant, they are enjoying an operating profit of 9.2 trillion won, which is equivalent to $7.2 billion. Considering that Samsung had enjoyed a profit of 6.14 trillion won or $5.2 billion in Q4 2015, that's almost a 50% increase in profits! At this point, one has to wonder, where did the "loss" suffered by the OEM due to the failure of the Galaxy Note 7 go?

The operating profit made by Samsung in Q4, 2016 is not only bigger than Q4, 2015, but it is also the biggest ever in any quarter of any year, second only to the profits enjoyed by the company in Q3 2013. This remarkable and astonishing feat was achieved thanks mainly to its semi-conductor and OLED departments, which managed to make record amounts of profit due to demand from Chinese smartphone manufacturers. In fact, out of the 9.2 trillion won operating profit reported by the company, 4.5 trillion won ($3.8 billion) came from its semi-conductor business alone. Some experts have also pointed out that Samsung's decision to deal only in USD has also played a big part here, especially since the Korean won is comparatively weaker by a very significant margin.

Saikat Kar (tech-enthusiast)

The Korean tech giant has made its financial report for Q4, 2016 public now and it shows how strong the company is as a whole. The total revenue acquired by Samsung in the last quarter of 2016 was 53.33 trillion Won/$45.72 billion, with an operating profit of 9.22 trillion Won/$7.9 billion. Considering that these figures show a hike of 50% as compared to Q4, 2016, as well as being the most impressive figures for Samsung since 2013, one has to wonder where did the losses incurred by Samsung after the Note 7 disaster go?

As it turns out, Samsung's semiconductor business, with assistance from its display business has more than made up for any losses that its Mobile department may have suffered due to the unfortunate incident. In fact, even the Mobile department does not seem to have suffered too much due to the Note 7's discontinuation. Samsung claims that the continuing excellent performance of the S7 and S7 Edge, in combination with better performance from its mid-range and low-range handsets have kept its mobile department profitable. As detailed in the report, Samsung expects a decline in sales and profits in the first quarter of 2017 as compared to Q1, 2016. This would be brought on as a result of marketing expenses and apparently a dip in the sale of television sets.

 Saikat Kar (tech-enthusiast)


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