Phones

Samsung says Galaxy Note 7 recall will cost a ‘heartbreaking amount,’ analysts predict $1 billion hit

Samsung has shipped more than 2.5 million units of the Galaxy Note 7 ever since this smartphone was released in the third week of August. The company is now having to recall those units because of a battery cell issue that Samsung has identified. It’s going to voluntary replace all Galaxy Note 7 units or give them full refunds if they no longer want to use the company’s latest flagship. Naturally, there’s a cost associated with this exercise, and while Samsung wouldn’t confirm how much it expects to spend on the recall the head of its smartphone business Dong-jin Koh would only say that it’s a “heartbreaking amount.” He made this comment when asked about the financial impact of the Galaxy Note 7 recall at a press briefing last week.

Analyst estimates compiled by Bloomberg suggest that Samsung is going to take a $1 billion hit on the Galaxy Note 7 recall. However, many hold the view that any short-term financial loss would be easier to bear for the company than any long-term damage to its brand. It’s easy for analysts to predict a dollar amount that will impact Samsung but only the market will dictate whether or not there’s any lasting damage to Samsung’s brand because of this recall. Some concerns have already been raised about the way Samsung is handling the Galaxy Note 7 recall but for its part, the company seems to be convinced that it would rather spend a billion dollars than try making excuses for an issue which could potentially damage its brand in the future.

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PATRABHI
PATRABHI

Skipped Note5 and thought of upgrading directly to Note7. But now I think it’s better to hang on with my Note Edge, the perfect “EDGE” flagship ever.

Bacchanalia
Bacchanalia

I just made an account simply to say HAHA. That’s just one of the risks of not having a changeable battery – and they already proved you can have that with water resistance with their own S5. I wanted to upgrade badly, and hoped they had learned their lesson from the Note 5, but oh well. Sent from my fully paid for, rooted Note 4 with Anker 6440 battery I get 10-12 hours of screen on time over a day or 2. And can turn my TV on with, not to mention access menus on ones at work. Which it… Read more »

baconman4321
baconman4321

What is the big deal they just send new phones and the old once they will replace the battery and sell then as refurbished

warlockba
warlockba

The big deal? I can tell you – 6 month old hardware (that is 6 months already) + 6 months untill all phones are replaced (that is 12 months) … that is already the release date of the Note 8 (or at least the high time of the rumor mill for it) – and for that people spent 850 euros 🙂

Jdzspace
Jdzspace

That makes no sense. He is saying that Samsung will be able to refurbish and resell the 2.5 million that they get back. So it won’t be a huge loss for them.

What are you talking about 6 months? New phones will be available in less then a week. It won’t be long until this while thing is a memory

Hoggington
Hoggington

It won’t go as quick as they hope. Just watch. And it will easily be a 1 billion or more loss. They’ve also given out millions in free promos with the N7…turns out for nothing. Add on all the freebies they are giving people for the hassle and the compensation to carriers. Easy to see why some are saying closer to 1.5 billion total loss. Huge.

Jdzspace
Jdzspace

Cite your source, if they say new phones will start coming out next week. Don’t you think with a new iPhone coming out in 17 days it would behoove them to get it out quicker? And they didn’t give millions out with promos. The only career that did buy one get one was Verizon, but it wss really buy one get one 70% off. But you understand that Verizon doesn’t get that device for free right? They still pay Samsung retail for that device. And you really think out of 2.5 million sold, they gave out millions……You realize that makes… Read more »

o0MHJ0o
o0MHJ0o

Yep, because Samsung signed a secret deal with Apple that they’ll provide sAMOLED screens for the iPhone next year and some of the awesome power of the Exynos chipset if they backfired their Note7.

ThaiM
ThaiM

The vulnerable GG5 screen is already a deal breaker for me. Will hang on to my Note 4 for another year yet.

vpoulios
vpoulios

Samsung has taken the right way in this matter. However the 2.5 million units can be repaired and sold afterwards as refurbished phones for 75% of the initial price

Hoggington
Hoggington

Not gonna happen like that.

Alexy2k
Alexy2k

What to do you release too fast that why it happen u should do long testing first before sell to us…

SenorSjon
SenorSjon

Heartbreaking? What is heartbraking is the lack of IR, removable battery, lack of flat screen, silly glass back, etc, etc. Rushing the phone was the casue of this self-inflicted damage.

If I read the XDA forums, it looks like the early released versions are a mess. I think the battery recall was to get all the bricked, S-pen stuck and scratched phones back. 😉

Hoggington
Hoggington

What’s heartbreaking are the careers that will be destroyed over this. And the families that will be affected. Us, the end user, no big deal in the end. Just a hassle, no more.

The people losing jobs because of this mess, is the real heartbreaking part.

ASH8
ASH8

Learn your lesson Samsung, make your phones with replaceable Batteries, simple.

ThakurJaiSingh
ThakurJaiSingh

This was bound to happen when they didn’t listen to there customers….all the feedback from customer goes in trash….they cannot compete with apple(pls do not judge me as i m not a apple fanatic) as i m using note from his origin till note 4 as note 5 was full of shit…note 7 has agian raised some hope to note fanatic but this happens…

Jdzspace
Jdzspace

That’s an odd thing to say since Samsung out sold Apple in America for the first time last year. And continued to do so this year. Not to mention always outselling then over seas, and has consistently rated higher in consumer reports for years.very interesting definition of “can’t compete” you have there.Hmm

eSeM
eSeM

I expect ebay will be flooded with refurbished Note 7s in a few months time 🙂

I remember the good old days, when I could replace my battery.