According to estimates compiled by Bloomberg analysts, Samsung may spend as much as $1 billion to replace all of the 2.5 million Note 7 it shipped in the two weeks that the handset's been on sale. 1 in 24 devices of so is possibly carrying a deffective battery unit that's prone to catching fire and exploding while charging.
Still, the potential financial damage to the company represents less than 5% of its projected net income of $20.6 billion for 2016. Some of it might be picked up by Samsung SDI, which supplied 70% of the batteries to Samsung Electronics. It has now stopped ordering them.
Unfortunately, the recall has ruined the timing advantage that the Galaxy Note 7 had over the upcoming iPhone 7. Although the Note 7 garnered favorable reviews and benefited from Samsung's strong-arm marketing, its early sales were reinforced by the absence of new iPhones. But now, Samsung has halted sales of the phablet in 10 main markets and the Note 7's reputation has been tarnished.
IDC Singapore analyst Bryan Ma predicts Samsung will take a sales hit this quarter, but doesn't foresee a long-term impact if the company manages to turn the situation around quickly enough. So far, Samsung has been quick to respond with the recall, although the Note 7's defects will inevitably leave a red mark in what has otherwise been a stellar year for the company's image and financial well-being.
This story is part of:The explosive Galaxy Note 7 saga (140 updates)
9 November Canadian couple abroad had to destroy their Note 7 phones to get home, files class action lawsuit against Samsung Alright, the Galaxy Note 7 fiasco is almost over. Samsung has recalled all of the units and issued a software update that limits active phones batteries to a 60% charge to incite people that haven't returned theirs yet to do so. On top of that, the company is posting apology after apology — a string, which culminated in a full-page remorseful letter to its customers, posted in some magazines yesterday.
8 November Samsung Canada will exchange Galaxy Note 7s, bought from a third-party Ever since the official recall of the Galaxy Note 7 was put into motion, there has been a particular group of buyers that wondered what will happen with their devices now. That is the portion of the users that bought the phablet off eBay, Swappa or similar unauthorized sites and resellers...
3 November Samsung promises to work hard towards regaining consumer trust The Galaxy Note 7 saga is almost behind us (or at least we hope it is), but the aftermath of it is still very serious for Samsung. Not only did the tech giant lose enough money to make any CEO cringe, but it also felt serious repercussions on its brand image...
3 November Samsung promises to get rid of its Galaxy Note 7 stockpiles with minimal damage to the environment Samsung says that it's reviewing ways of limiting the environmental impact caused by the Galaxy Note 7 discontinuation...
1 November Chinese customers outraged after Samsung execs kneeled to apologize for the Galaxy Note 7 fiasco In return, Samsung held an event in a Chinese city where many of the local distributors were invited. Furthermore, in order to thank these retailers for their continuing support of the brand, all Samsung execs present at the event, as well as all other members of the staff kneeled on the stage in front of the audience...
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