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Samsung: Note 7 debacle will cost billion in lost sales
A melted Galaxy Note 7. AP
Samsung announced its Galaxy Note 7 recall will cost the company about $3 billion (3.5 trillion won) in operating profit due to discontinued sales.
It expects most of the lost sales (about $2.2 billion) to hit the bottom line next quarter, and the remainder in the first quarter of 2017.
The South Korean company halted production and global sales of its Note 7 phone Monday after weeks of reports that the device would overheat and catch fire.
Samsung recalled the device and beganissuing replacementsto customers on Sept. 15, but those devices also suffered the same fire-prone defect.
The company was criticized for failing to formally recall the device despite the reports and for not communicating the safety concerns to customers quickly enough.
After weeks of incidents involving the phone catching fire, Samsungofficially recalledthe device for good on Monday.
The company said it would focus its efforts on its other flagship models like Galaxy S7 and Galaxy S7 edge to make up for the loss in sales from the discontinued Note 7.