The South Korean electronics giant Samsung has reiterated that they will be recovering quickly after they faced a disastrous withdrawal of their Note 7 which were prone to fire. This withdrawal claimed Samsung’s third quarter earnings from their mobile business to their lowest level in not less than eight years.
Samsung also suggested that the problem of catching fire might not be limited to batteries but it could be beyond that also, hence they are expanding their probe as well. This probe has been initiated to restore the faith of investors after the tech industry witnessed the worst product failure in their entire history. Samsung has also promised a complete corporate makeover from US hedge fund Elliot Management. It has also decided to set aside its plan of semiconductor business and has disclosed considering a share buyback.
The Co-chief Executive of Samsung apologized for the debacle in a general meeting that held in Seoul after he released company’s result. Mr. JK Shin the co-CEO said, “We know we must work hard to earn back your trust and we are committed to doing just that.”
Samsung could see sweeping changes at the top management level but the investors need to wait till the entire probe on Note 7 hits its bottom. All in all, Samsung is a family run corporation and its Chief Executive Kwon Oh-Hyun said that the company will decide the responsibilities only after the crisis are over. The company has seen a 96% nose-dive in its third quarter mobile earnings to $87.63 million (100 billion Won) which is their lowest since the fourth quarter of 2008.
Samsung is now expecting a recovery in its earning which will be similar to the fourth quarter of 2015. Samsung had to recall almost 2.5 million Note 7, which was its initial selling due to the fire-prone battery. But Co-CEO Shin believes that the problem is not limited to the battery the root cause goes deeper than what they actually thought.