Delayed shipments of Galaxy Note 7 amid 'battery explosions' threaten Samsung
Attendees gathered around display tables to view the new Samsung Galaxy Note 7 smartphone during a launch event. Photograph: (Reuters)
Samsung Electronics Co Ltd is down to a two-week low on Thursday over concerns of mobile earnings after it delayed shipments of its Galaxy Note 7 smartphone and reports of exploding batteries.
Late on Wednesday the tech biggie announced the delays for quality control testing and also said Galaxy note shipments to South Korea’s top three mobile carriers had been stopped for the time being, crushing investor hope for strong second-half mobile earnings.
Quality control problems, if confirmed, could be a major blow to the world's top smartphone maker, which was banking on the Galaxy Note 7 to defend sales momentum against the new Apple Inc phones expected to be unveiled on September 7.
"Apple is supposed to show off the iPhone 7 next week and this issue (with Samsung) has emerged, so the current state of things do not look good," HDC Asset Management fund manager Park Jung-hoon said.
Though a components pick-up will buttress overall profits, Park said mobile operating profit might decline by up to 200 billion won for July-September.
The mobile division accounted for about 54 per cent of Samsung Electronics’ January-June operating profit of 14.8 trillion won ($1 = 1,120.8100 won).
Hyundai Securities said in a report released that the Galaxy Note 7's problems should be resolved within a "few weeks".
(WION with inputs from Reuters)