Samsung Galaxy Note 7 Recall: Its Pros, Cons And Costs

By Adie Pie , Sep 07, 2016 04:10 AM EDT
Samsung Galaxy Note 7 discontinued in the wake of fire reports
Samsung’s current recall of the Galaxy Note 7 is coming as a shock to the general public, after rumors surrounding the release were stellar. Nevertheless, the recall is costing the company lots of money, which buyers could benefit from. (Photo : Drew Angerer/Getty Images)

Ever since users of the Samsung Galaxy Note 7 first started complaining about exploding units, the public has been questioning why and how the Korean tech giant could have let this happen. Though the cause is clear - an imbalance in the lithium-ion batteries - the recall is going to cost Samsung a great amount of money, maybe even billions. And while this definitely spells trouble for both the company and its clients, there could be a shining light for interested buyers.

The Compensation

As Beta News reports, current Galaxy Note 7 users in the US can opt to have their handhelds exchanged for a new unit that has gone through more thorough product testing, or to get a full refund. In addition, Samsung will also provide a $25 rebate on the user's phone bill.

The Numbers

After all the units have been recalled, retested and redistributed, Samsung may be down by as much as $1 billion. This is a stark comparison to the expected revenue of $1.5 billion and profit of $270 million from its first 2.5 million units.

The Remaining Units

From the 2.5 million units that were already ready for shipping, an estimated 1.5 were already shipped out. That means that as many as 1 million units never made it out before Samsung ordered the recall.

Once the released units are recalled, Samsung is bound to replace the only thing that is making the unit risky - its battery. This is a relatively easy fix, but the problem is that no one will want to buy a refurbished phone at market price. As Yahoo! notes, Samsung might opt to sell the fixed devices for a lower price, in order to minimize its costs. While this will definitely entice buyers, especially those that found the original price tag too steep, Samsung has not confirmed such a program.

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