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ENERGY TECH
Samsung blames Galaxy Note 7 fires on faulty batteriesW/LLL
By Hwang Sunghee
Seoul (AFP) Jan 23, 2017


Samsung Q4 profit leaps 50%: firm
Seoul (AFP) Jan 24, 2017 - Samsung Electronics reported a 50.2 percent jump in fourth-quarter profits on Tuesday despite the humiliating Galaxy Note 7 recall that hammered the reputation of the world's largest smartphone maker.

In a statement, Samsung said it posted operating profits of 9.22 trillion won (US$7.9 billion) during the October to December period.

Earnings were "driven by the components businesses, mainly the memory business and the display panel segment", it said, with the stronger US dollar also boosting profits.

Revenues were largely unchanged at 53.3 trillion won for the three months, the South Korean tech giant said.

For the full year, it said in a statement, "Samsung achieved solid results despite the Note 7 discontinuation in the second half" -- the only reference to the debacle that saw the company withdraw its flagship device.

Samsung Electronics was forced to discontinue the smartphone in October, originally intended to compete with Apple's iPhone, after a chaotic recall that saw replacement devices also catching fire.

Earlier this week it blamed faulty batteries from two different suppliers for the incidents.

Operating profits for 2016 reached 29.2 trillion won, up 10.7 percent year-on-year, the firm said, even though revenues were almost flat at 201.9 trillion won, up 0.6 percent.

The world's biggest smartphone maker Samsung blamed faulty batteries on Monday for the fires that hit its flagship Galaxy Note 7 device last year, as it sought to draw a line under the humiliating recall.

Samsung Electronics was forced to discontinue the smartphone, originally intended to compete with Apple's iPhone, after a chaotic recall that saw replacement devices also catching fire.

The debacle cost the South Korean company billions in lost profit and reputational damage, during a torrid period when it has also been embroiled in a corruption scandal that has seen President Park Geun-Hye impeached.

Internal and independent investigations "concluded that batteries were found to be the cause of the Note 7 incidents", Samsung said in a statement.

"We sincerely apologise for the discomfort and concern we have caused to our customers," said Koh Dong-Jin, the head of its mobile business, bowing before hundreds of reporters and cameramen at a press conference.

Samsung Electronics is the most prominent unit of the giant Samsung group, South Korea's largest conglomerate with a revenue equivalent to about a fifth of the country's GDP.

It announced a recall of the oversized Galaxy Note 7 in September 2016 after several devices exploded or caught fire, with the company blaming batteries from a supplier.

When replacement phones -- with batteries from another firm -- also started to combust, the company decided to kill off the Note 7 for good.

In total 3.1 million devices were recalled as authorities in the US and elsewhere banned the device from use on planes and even from being placed in checked luggage.

Samsung has since embarked on a campaign to restore its battered reputation, issuing repeating apologies and putting full-page advertisements in US newspapers, admitting it "fell short" on its promises.

Analysts said Samsung was looking to move on through the announcement, which did not implicate other devices.

"Consumers tend to be forgiving the first time," said Tom Kang, research director at Counterpoint Technology. "But if it happens again, it will leave a lasting mark on Samsung's quality and brand image."

Samsung had concentrated on innovative design, thinness and battery capacity rather than safety, he said.

The firm's next model, the Galaxy S8, had been expected to be unveiled at next month's Mobile World Congress in Barcelona. But Samsung's Koh said it would be delayed to ensure it had no safety problems.

- No legal action -

Samsung said it deployed around 700 researchers and engineers on its investigation, testing more than 200,000 fully-assembled devices and more than 30,000 batteries.

It did not identify the battery makers on Monday, but independent investigators UL and Exponent agreed with the findings.

One of the defective batteries had a design flaw that pushed down its right corner, while the other had faulty internal welds, said Kevin White, principal scientist at Exponent.

Around 1,000 different parts from some 450 suppliers were needed for each Galaxy Note 7.

But Koh dismissed the possibility of suing the manufacturers. "Whatever parts we use, the overall responsibility falls to us for failing to verify its safety and quality," he said.

Samsung acknowledged that it provided the battery specifications, adding in its statement: "We have taken several corrective actions to ensure this never happens again. The lessons of the past several months are now deeply reflected in our processes and in our culture."

Sister company Samsung SDI confirmed it was one of the battery makers, saying in a statement it had mounted its own investigation into the units and now had "a more thorough verification process".

Samsung Electronics is set to announce fourth-quarter and full-year results on Tuesday and has estimated the cost of the recall at $5.3 billion.

But investors welcomed Monday's announcement, with Samsung Electronics shares closing up 2.3 percent at 1.90 million won.

The firm has separately been caught up in a wide-ranging political corruption scandal, with prosecutors last week seeking the arrest of its vice-chairman Lee Jae-Yong on charges of bribery, embezzlement and perjury.

Lee, who became Samsung's de facto head after his father suffered a heart attack in 2014, is accused of bribing Choi Soon-Sil, Park's secret confidante at the centre of the scandal, and receiving policy favours from Park in return.

Samsung is the single biggest contributor to two non-profit foundations controlled by Choi, but a court rejected the arrest request due to insufficient evidence.

sh/slb/sm

SAMSUNG ELECTRONICS


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Previous Report
ENERGY TECH
Samsung probe finds faulty batteries triggered fire
Seoul (AFP) Jan 20, 2017
A Samsung probe into the exploding batteries that forced the electronics giant to scrap its Galaxy Note 7 smartphones has found irregularly sized batteries caused overheating, the Wall Street Journal reported Friday. The South Korean conglomerate was forced to discontinue its flagship Note 7 after a chaotic recall that saw replacement phones also catching fire, with the debacle costing the c ... read more


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