Sales of Galaxy Note 7 handsets resume strong
Samsung Electronics Galaxy Note 7s are displayed at a handset outlet in Gangnam-gu, southern Seoul, Saturday. The electronics maker said it restarted providing the Note 7 without battery problems in Korea more than a month after it stopped selling it. / Yonhap
By Lee Min-hyung
Samsung Electronics sold more than 21,000 Galaxy Note 7 handsets on the first day of its official sales resumption here, after its global recall due to faulty batteries, according to sales data by the nation’s three mobile carriers.
The sales figure ― combined by SK Telecom, KT and LG Uplus ― dispelled concerns that the company brand may be tarnished following the battery problems of the 5.7-inch flagship smartphone.
“In the Korean smartphone market, we consider a sales record of 10,000 per day as a big hit,” said an industry source. “It remains to be seen whether the handset continues to sell well, but for now, it seems the company has rebounded at least in the local market.”
Samsung Electronics said it will soon expand its sales resumption internationally, as the firm is in the final phase of its global recall. In Korea, more than 80 percent of Note 7 consumers returned their handsets, with 90 percent of them opting to exchange their devices with new ones rather than seeking a refund, according to Samsung Electronics.
Analysts said the company’s IT and mobile communications (IM) division is expected to suffer short-term deficits, but its swift decision to recall all the handsets has prevented the firm from losing customers’ trust on a long-term basis.
“We downgraded the firm’s operating profit projection in the third quarter from 7.8 trillion won ($7.65 billion) to 7 trillion won, but the decision to recall was the optimum countermeasure,” Samsung Securities analyst Hwang Min-sung said in a report. “This year’s sales projection for the new Note 7 will be around 6 million from the previous estimation of 12 million.”
Hana Financial Investment analyst Kim Rok-ho said: “The recall will not damage the firm’s brand image, as the company has swiftly recalled the handsets.” He said negative impact following the Note 7 recall has already been reflected on its stock value, so the firm is not expected to suffer any long-term setback.
The remark reflects that shares of the tech giant nosedived to 1,465 million won on Sept. 12, the lowest since Aug. 27 in 2012, due to the aftermath of the global recall. But the stock value continued to recover to close at 1.598 million won on Friday.
Meanwhile, Samsung Electronics plans to unveil its earnings guidance on Oct. 7. In the second quarter, the company reported an operating profit of 8.14 trillion won, up 18 percent from the previous year, due to strong sales for its flagship Galaxy Note 7 handset.