Samsung will likely take a $17 billion hit on the Galaxy Note 7

The Galaxy Note 7 got off to a very promising start a couple of months ago. Samsung was set to have one of its best years as earnings were buoyed by the spectacular performance of the Galaxy S7. Merely two weeks after the flagship was released reports of a potential battery cell defect starting pouring in and Samsung soon recalled all units. It then sent out replacement units which were supposed to be safe and they started having the same problem as well. Earlier today Samsung announced that it was officially halting sales and replacements of the Galaxy Note 7 and just a few hours ago the company confirmed that it will no longer produce the flagship. The Galaxy Note 7 is dead and Samsung is likely going to take a $17 billion hit.

When the Galaxy Note 7 was recalled, it was estimated that the cost of replacing more than two million units is going to be over $1 billion. That’s no longer the case. Samsung is without a flagship smartphone to sell in the upcoming holiday season and the lost sales will add up quickly. Analysts at Credit Suisse estimate that lost sales of up to 19 million units will cost the company around $17 billion. Analysts had previously estimated that missed sales and the cost of the recall will amount to $5 billion if Samsung started selling the Galaxy Note 7 in the fourth quarter of this year. Now that the flagship is dead the financial impact will be greater.

Then again, it’s not the end of the world for Samsung. The company has a market value of more than $235 billion and is sitting on record-high cash reserves of over $69 billion. It can certainly absorb the impact, and we can be sure that Samsung will have no intention of ever going through something like this again.

Via

Phones 8
Related newsLatest news
8 Comments

Leave a Reply


herpherpherp
7 months 13 days ago

This is what happens when you don’t release flat phones, the gods punish you for forcing edge displays on customers.

RIP Samsung.

Teju joshi
7 months 13 days ago

As a I’m Indian. I glad this good happen with them. They always last launch or sell in India. Not doing good with our emotions.

But as a Samsung fan I really miss out note 7.

Today I ordered s7E.

SenorSjon
7 months 13 days ago

Well, here they don’t launch phones at all:
- Note7 never left pre-order stage
- A9 Pro not for Europe
- C9 not for Europe
- Note 5 not for Europe.

thegeneral2010
7 months 13 days ago

Iam really happy to wat happened to Them afterwhat they have done to my note 4 .

Ginge22
7 months 13 days ago

I’m a Samsung fan. but I’m glad they’re taking such a big hit, they needed one. I was very disappointed with the Note 7 spec wise. It was an S7 Edge with a stylus and a weaker battery. I didn’t like the edges either… terrible for using the stylus with. Overall, the Note 7 never felt like a phone with a one thousand dollar price tag to me.

So maybe now Samsung will be forced to actually be innovative with the Note 8. Hopefully they won’t just piggyback off the S8 and give us a true Note. A 4k screen is a good start, hopefully the processor and ram will be top notch and I’d love to see the return of the IR blaster and drum roll…. a removable battery! That certainly would have solved a lot of problems, wouldn’t it? Oh, and give me a flat screen variant as well. If I want gimmicks, I’ll get an S8. I hope Samsung will be listening to their user base after this disaster.

herpherpherp
7 months 13 days ago

Yep curved display on a stylus phone? WHAT are they thinking!?

ijazali
7 months 13 days ago

Right Now Note 7 be like ” Will you still love me when I am no longer young and beautiful”

spider184
7 months 13 days ago

Samsung is not without a flagship smartphone. The Samsung Galaxy S7 Edge is a pretty good competitor I would say. Also bear in mind, that the Note 5 was only launched in some countries. I think most imporant is, that Samsung learns from this episode and it wouldn’t be the first time that Samsung used a difficult situationm to come out stronger.

 
Top