We will work hard to regain trust- Samsung Co-CEO

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JK Shin, Co- CEO of Samsung Electronics said that it aims to recover from the disastrous withdrawal of the fire-prone Galaxy Note 7 very fast. This move has dragged third-quarter mobile earnings to their lowest level in last 8 years.

The smartphone making, South Korean giant said it was expanding its probe into the Note 7 fires beyond batteries, as it tried to reassure its investors that they would get to the bottom of one of the worst product failures in tech history.

“We know we must work hard to earn back your trust and we are committed to doing just that,” said co-chief executive JK Shin as he apologized for the debacle at a general meeting in Seoul.

Investors now expect sweeping management changes in response to the Note 7 failure, especially after voting to make parent conglomerate Samsung Group’s de facto chief, Jay Y Lee, a Samsung Electronics director.

The world’s top smartphone maker, Samsung, posted a 96% plunge in third-quarter mobile earnings to 100 billion won ($87.63 million) from a year earlier, their lowest level since the fourth quarter of 2008.

The result, the first since the mass recall and subsequent cancellation of the premium Note 7 earlier this month, spared Samsung from its first-ever mobile loss even though overall profit hit a two-year low.

The scrapping of Samsung’s flagship phone erased 0.1 to 0.2% points from South Korea’s third-quarter GDP growth in quarterly terms, a finance ministry official stated in a report.

What went wrong?

As for what went wrong, Samsung still does not know what caused the fires in devices sent to customers as replacements for the initial 2.5 million Note 7s it recalled due to fire-prone batteries.

Co-CEO Shin said the battery might not be the only problem, suggesting the root cause may be more difficult to determine than had been hoped.

Investors now want a clear plan for how Samsung will revive earnings growth, repair its tattered brand image and boost shareholder returns, hence the company’s promise to consider a share buyback.

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Sameeksha Bhardwaj, From ITvoir News Desk

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