The Galaxy Note 7 fiasco is likely to have a negative impact on South Korea's GDP

The Galaxy Note 7 fiasco is likely to have a negative impact on South Korea's GDP
According to a fresh report from Reuters, the Samsung Galaxy Note 7 fiasco is bound to have a negative impact on South Korea's Q3 2016 GDP.

The report, quoting an unnamed finance ministry from the country, says that Samsung's decision to kill off the Galaxy Note 7 is estimated to have erased somewhere between 0.1 and 0.2 percent from South Korea's GDP quarter-on-quarter growth in Q3.

The news comes on the heels of a recent statement from the Bank of Korea, which estimated a Q3 GDP growth of 0.7 percentage points compared to the previous quarter.

In the past few weeks, we came to know just how big of an impact the Galaxy Note 7 conundrum has had on Samsung's financial wellbeing. Soon after issuing the second Galaxy Note 7 recall, Samsung slashed its Q3 profit estimated by $2.3 billion and nearly halved its revenue estimate to $43.5 billion. As if that wasn't enough, reports argue that Samsung may put a lot of R&D projects on the backburner because of Note 7. Also, a recent report from the WSJ claimed that Samsung may also delay the launch of the Galaxy S8.

It looks like the Note 7 recall and the decision to scrap the handset entirely spelled trouble not only for Samsung but for the entire South Korean economy. As a side comment, this highlights the weight that Samsung bears for the South Korean economy. Unfortunately for the entire nation of South Korea, however, it looks like the cause behind the Note 7 explosions remains unknown despite the fact that Samsung is allocating a lot of resources to identify the root of the problem.

source: Reuters

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18 Comments

1. darkkjedii

Posts: 30966; Member since: Feb 05, 2011

The fact that they can't pinpoint the cause, is gonna seriously hurt S8 sales if it's not found by then. People are gonna shy away, if they don't what's wrong. This could be bad Samsung, find and fix the issue. If the s8 explodes and is recalled...goodnight Samsung mobile.

2. xondk

Posts: 1904; Member since: Mar 25, 2014

Yeah, you have to wonder, because they can put their devices through a ton of stuff, which is also why it they cannot reproduce it. Add that they most certainly know that saying "We can't find the problem" is significantly worse then saying "We messed up with x" I can't help but wonder, and not for any paranoia or tinfoil hat reason, but if this could be a case of legit sabotage, it isn't like finding 100+ people willing to harm Samsung would be a difficult thing, given the oddities and such in this whole issue, people not handing back phones e.t.c. And all you need would be a way to trigger a fault in the phone's battery, makes me wonder what happens if you simply force current into charging port beyond specs and such? in a similar fashion to the USB PC kill sticks out there.

12. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

The reason they can't reporduce the fault, is becaueit is hard to pinpoint the failure. The fact is, it isn't the battery. I mean think about it, if it was the battery, then why is the issue appearing on both models that used batteries from different manufacturers. So the battery isn't the issue. All the battery is made by different people and the chances both company's have the exact same fault is 0%. Could it be the display? Is the waterproofing so tight on some phones, that heat can't escape and its causing the phone to overheat and explode? After all, some did catch fire that were not charging. The the extreme is coming from somewhere. Is it the heat pipe failing to control he temperature? They simply are goign to have to drive the S8 QC up to make sure it doesn't repeat the issue. No other phone they made before has ever done this. It could just be a freak accident. The fact is, they don't have to find the source of the issue, just look at past products and see what is being done differently that is causing the issue. Like what si the relationship with QuickCharge 2.0 vs what USB Type C offers. To me its just a different port. Is it possible they don't work together? is the fault in the current controller? I mean the battery is design to release a certain amount of power, is this exceeding the controller? if there a wire that is touching something it shouldn't? Failed circuit? The reason its hard to find is, when the phone catches fire, the evidence as to the cause is destroyed. Unless they open a phone, set a special camera up to record the phone, charge it and somehow put it through its normal paces and even do hardware burn-in to push the device to its limits and have it explode on camera to see where the fault could come from, they may not even know. For all we know, an employee could have put some kind of chemical inside some phones while being put together, that catches fire later. I mean look at the numbers. Orginally Samsung shipped 2.5M phones. Roughtly 1.5M actually were in peoples hands. 92 shows some kind of sign of overheating, which I have no idea what that is. My phone got hot a couple times, but every phone I've ever own gets really hot if you use it and charge it at the same time. Out of 92 in the USA that showed some sign of an issue, only 26 actually caught fire. That's 26 out of 2.5M originally shipped. Then the second batch. Roughly 90% were replaced with a Note 7. That means roughly 1M replacements were given out and sold. Out for those, 6 more caught fire. Again its 6 out of 1M possible phones. It means Samsung trying to find a needle in a haystack. The fact is the vast majority for whatever reason don't have the same flaw. If they did. all of them should have caught fire, back to back to back to back. Yet Samsung has brought them in-house and can't repeat the issue. They didn't rush, its not a QC issue.

6. Plasticsh1t

Posts: 3100; Member since: Sep 01, 2014

Maybe they know but they won't reveal the information for unknown reasons. It's not really hard to pinpoint the cause for a multi billion dollar corporation like Samsung.

7. xondk

Posts: 1904; Member since: Mar 25, 2014

It seems odd that they wouldn't want to reveal it, as it hurts them significantly more to say "We don't know" meaning they cannot fix it, so future products could have same problem? So it doesn't seem to be that? However it can be very hard for a multi billion dollar corporation if said problem is caused by an external device, such as those usb kill devices? because the fault wouldn't be with the device?

10. sissy246

Posts: 7070; Member since: Mar 04, 2015

Think about it, why would they hide it if they find the problem. Right now it would help them for people to know they found the problem and can now fix it.

13. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

First off, since the testing is being done by more than just Samsung, and even the CPSC can't recreate the issue, shows Samsung isn't hiding anything. You always wanna assume they are hiding. Ok lets buy your argument and say, yes Samsung knows what the issue is and isn't saying anything. So what about the CPSC? What about the other parties who tested the battery and can't find an issue? Are they being paid by Samsung to be quiet? I doubt it. You must be high.

18. jeroome86

Posts: 2314; Member since: Apr 12, 2012

I hope they wouldn't hide such a thing. Best case they discover the cause and say this is how we solved it. I wonder if it was too big a battery in slim enclosure but that's speculation at this point. Who knows? Hope we do find out.

9. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

I disagree. Because this hasn't happened to the Galaxy S. That's the true benefit from keeping the phones separate even though they are all Galaxies. The S outsells the Note 3 to 1. It may throw off the band-wagoners, but not everyone else. With the S8 coming with all the Note 7 features and more, only an idiot wouldn't buy it.

3. straightfromhell

Posts: 15; Member since: Oct 24, 2016

Phonearena is adik in posting article about negative news bout note 7 lol

4. deewinc

Posts: 455; Member since: Feb 21, 2013

Someone should post about the sudden demise of Note 7 explosions after the second recall and discontinuation of the phone. Given that there are over a million Note 7s in the hands of those that don't want to return it and some still being sold in Hong Kong, I find hard to figure out why the sudden disappearance of exploding Note 7's.

11. sissy246

Posts: 7070; Member since: Mar 04, 2015

Disappearance, just scroll through PA you will find a lot on it. Some just posted a few days ago. What does make a disappearance is the iPhones catching fire. You see article after article about Samsung but with the iphone you see that article and never a follow up.

5. InternetThug

Posts: 1; Member since: Oct 25, 2016

Campfire for bums

8. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

This article is just more BS from PA and whoever they copied the article from. Samsung is roughly 25% of its country GDP. One product where they sell roughly 20-30M individual items, isn't going to hurt their GDP. It would take some sizable like, the Galaxy S or all there smartphones as a whole. PA will post anything negative abot Samsung, even if it carriers no weight whatsoever. PA writers are just as stupid as the fanboys here on either side of the coin.

14. Plasticsh1t

Posts: 3100; Member since: Sep 01, 2014

You must be very intelligent to haven't noticed that the source link is from Reuters. Check it out.

16. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

No...you didnt read the source. The source link goes to a reuters article about Smasung not buying some audio company. It doesn't talk about South Korea GDP hwoever, my post shows the full details of what PA was elluding too, but purposely left out the facts -http://fortune.com/2016/10/25/samsung-note-7-hyundai-strikes-korea/ Maybe you should actually read! or click the source link...lol

15. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

Gonna show how half-assed and purposeful PA is at not reporting the facts. According to the facts, the issue with South Korea's GDP going down, is based on issues with 2 companies, while PA tried to make it seem its just Samsung. According to the actual fact -http://fortune.com/2016/10/25/samsung-note-7-hyundai-strikes-korea/ - The GDP is in question because of Samsung and Hyundai. Anytime PA reports some news on Samsung, no matter what news, Google the same info and fine and article hat actually gives the full facts and not PA's alternate reality of the facts, which are just Samsung hate in disguise.

17. PrYmCHGOan

Posts: 335; Member since: Sep 28, 2016

PA - The source link on this article, does not go to anything about Samsung GDP effect, it goes to the article about Samsung stating they aren't buying the audio company. This si the story you are trying to source -http://fortune.com/2016/10/25/samsung-note-7-hyundai-strikes-korea/

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