Samsung’s costly and embarrassing recall of its flagship Galaxy Note7 smartphone last year tarnished the company’s reputation, but it hasn’t really hurt its bottom line. Samsung’s Q4 2016 profits grew nearly 50% from Q4 2015, according to a statement from the company.
Samsung’s Q3 profits did take a hit after it was forced to issue a wide-ranging recall of 2.5 million Note7 phones because some were catching fire and exploding. The company lost $25 billion in market share over the debacle — roughly the entire value of Hewlett-Packard. But even that combined with the Q4 recall of 2.8 million of its smart washing machines, which were also exploding, did not seem to have made a dent in Samsung’s overall profits.
Samsung is worth $216 billion, according to Forbes, and sells everything from life insurance to semiconductors. It’s considered one of the pillars of the South Korean economy. Though mobile phones are one of its most visible products, especially in the West, they are not its only moneymaker.
Professor Jinsuh Lee of Purdue’s Krannert School of Management, who previously worked at Samsung Electronics, told BuzzFeed News, “The Note7 is part of the mobile division, but what led to the growth is the semiconductor division. They’re related, but if you’re looking at the whole picture, the mobile division can still have a bad quarter or two while semiconductors can continue to grow.”
“Semiconductors are in high demand now because of the growth of mobile products across the world, especially in China. There are only a handful of companies that can produce them at that scale, Samsung is one of them. They’re getting the major benefit from the market increase.”
Reuters reports that strong sales of chips, data storage products, and smartphone components, as well as a rebound in sales of Samsung’s other smartphones boosted the company to its strongest quarter since Q3 2013.
Samsung had another win in 2016: It avoided a costly verdict when the US Supreme Court sided with it over Apple in a lawsuit alleging that Samsung copied elements of the iPhone’s design. Apple was suing for $400 million.
Samsung did not immediately respond to request for comment.
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