Samsung is now in damage control mode after discontinuing the Galaxy Note 7. It's taking steps to restore its reputation as well as contain the financial loss caused by what might have been its best flagship smartphone. The company has already ramped up production of the Galaxy S7 series to stay competitive in the market and now it's expected that Samsung will raise display and memory component prices for its customers to bring in more profit that can offset its financial loss from the Galaxy Note 7's demise.
Market research firm TrendForce reports that the discontinuation of the Galaxy Note 7 is going to alter market share of smartphone brands competing in the phablet market. It predicts that most of the demand will move towards Huawei, Oppo and Vivo, aside from the iPhone 7 Plus, now that the Galaxy Note 7 is out of the picture. Prices for key mobile components like DRAM, NAND flash and AMOLED panels have already been on the upswing due to supply shortages. Samsung's rivals are likely to take full advantage of its misfortune and boost their production thereby contributing to the shortage.
“This in turn would aggravate the supply shortage situation in the component markets. Thus, memory prices will not only continue to rise but actually also surge higher than expected,” TrendForce predicts in its report. It also mentions the possibility that to stay in profit after realizing a $5.3 billion loss because of the Galaxy Note 7, Samsung might increase prices of its display and memory components. It certainly helps that Samsung is the leading supplier of display and memory components worldwide.
