The Galaxy Note 7 recall might cut Samsung's profit by $740 million
posted by Cosmin V. / Sep 05, 2016, 6:39 AM
Since this isn't just damaging the company's image, many analysts were fast to offer their predictions regarding the costs of such a major recall.
Hwang Min-sung, an analyst at Samsung Securities, offered his view on the cost of the Galaxy Note 7's recall and said he expects Samsung to pay $108.5 million, which includes the replacement process.
This is the amount that Samsung will have to pay to recall and replace all the Galaxy Note 7 phablets that have already been shipped to customers and retailers. However, the spending doesn't stop here since most of the Galaxy Note 7 devices that will be produced in September will be used for the replacement program.
Basically, this means that the Galaxy Note 7 will sell less than previously predicted, so Samsung might end up with just 3 million units sold from 6 million units estimated for Q3 2016.
Due to the manufacture of the replacement units and less sales, Samsung's operating profit could be cut by approximately $360 million. Also, in Q4 2016, the recall program is estimated to cost around $270 million, said the analyst.
According to Hwang, “the recall is a negative factor in the short term but will surely be a wise decision because other alternative measures are unlikely to help Samsung regain confidence from consumers and investors.”
So, to sum it up, Samsung's operating profit might be cut by around $740 million by the end of this year, if we are to believe the numbers estimated by Samsung Securities' analyst.
source: Korea Herald
Posts: 152; Member since: Jan 29, 2014
But it will surely regain back confidence from consumers and investors. $735 million is hardly a ten days profit for samsung which it can easily live with. Kudos to the most innocative tech company to take the very right measures and for putting the customers interest at the top. Note 7 will surely bounce back , coz you just cant suppress the greatest smartphone ever made so easily .
posted on Sep 05, 2016, 6:49 AM 11
Posts: 2942; Member since: Jul 02, 2014
I believe Note 7 will never bounce back. Samsung will likely to improve it's successor, the Note 8. Exploding batteries is forever tagged in the Note 7 name thus concentration on the new Note.
posted on Sep 05, 2016, 7:20 AM 3
Posts: 3088; Member since: Sep 01, 2014
Other companies should take the opportunity to take sales from Samsung.
posted on Sep 05, 2016, 6:52 AM 2
Posts: 497; Member since: Jun 04, 2014
they surely will, especially Apple. Sony need to act immediately if they want to gain momentum.
posted on Sep 05, 2016, 7:06 AM 5
Posts: 17047; Member since: Jun 17, 2009
posted on Sep 05, 2016, 8:38 AM 2
Posts: 17047; Member since: Jun 17, 2009
Yes, very quick action. No procrastinating, immediately investigated, found the issue and announced full replacement in days. Some companies still haven't taken responsibility for their phone issues even though it's been years.
posted on Sep 05, 2016, 6:22 PM 2
Posts: 1390; Member since: Oct 05, 2014
iPhone 7 Release is going to drop the hammer on Samsung.
posted on Sep 05, 2016, 7:00 AM 2
Posts: 30687; Member since: Feb 05, 2011
Notes and IPhones cater to a different segment. Those who want a Note, will simply wait till they go back on sale and get one.
posted on Sep 05, 2016, 12:50 PM 2
Posts: 835; Member since: Dec 29, 2015
How can you see into my eyes, like open doors Leading you down into my core Where I've become so numb, without a soul My spirit's sleeping somewhere cold Until you find it there and lead it back home Wake me up, wake me up inside I can't wake up, Wake me up inside, save me, Call my name and save me from the dark, wake me up Bid my blood to run, I can't wake up Before I come undone, save me Save me from the nothing I've become Now that I know what I'm without You can't just leave me Breathe into me and make me real, bring me to life Wake me up, wake me up inside I can't wake up, Wake me up inside, save me, Call my name and save me from the dark, wake me up Bid my blood to run, I can't wake up Before I come undone, save me Save me from the nothing I've become I feel like this song suits the situation, #dicksoutforsamsung
posted on Sep 05, 2016, 7:02 AM 1
Posts: 1408; Member since: Jul 06, 2014
Hate to say this but the truth always hurts.... nOoNeMaKeSmOnEyFrOmAnDrOiD
posted on Sep 05, 2016, 7:26 AM 4
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