Galaxy Note Disaster Wipes Out Samsung's Mobile Profits

Earlier today, Samsung announced its third quarter results, giving us a first idea of the fallout following the disastrous launch of the Galaxy Note 7. The device, first released in August, was supposed to be Samsung’s new flagship smartphone, but turned into every company’s worst nightmare after several reports of the phone’s battery catching fire emerged. A global recall didn’t solve the problem, ultimately forcing Samsung to stop selling the Galaxy Note 7 altogether.

Samsung’s operating profit for the quarter amounted to 5.2 trillion won, down from 7.8 trillion Samsung had originally anticipated. As our chart illustrates, the incidents surrounding the Note 7 all but wiped out the company’s mobile profits. Operating profit from Samsung’s mobile communications segment declined by 96 percent compared to last year, burning a hole of more than $2 billion into the company’s accounts.

While billions of dollars in lost profit would be enough to put many companies out of business, Samsung is probably large enough to move on from this unfortunate episode down, but not out. In the end, there is a lesson to be learned from every disaster. This particular lesson being that spontaneous self-combustion is not a feature smartphone users are looking for.