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The Damages Caused By 'Galaxy Note 7' To Samsung, How Severe Is It?

By Staff writer , Dec 12, 2016 02:15 AM EST
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September 2016 marked a very tough month for the South Korean tech company, Samsung. Thanks to the exploding battery issues with the recently discontinued Galaxy Note 7, Samsung was forced to issue an expensive global recall to compensate for the problem. The solution didn't work so well and a second recall was initiated, along with the production of the handset ending. The Note 7 was projected to be one of the biggest-selling smartphones of the year. Instead, it became a major problem that Samsung had to discontinue it once and for all.

Note 7 failure took a huge hit on Samsung

There's certainly been a massive financial hit to Samsung's yearly sales. It's important to know that recalls are expensive, and has no commercial upside. Samsung's losses on the Note 7 failure could go as high as one billion dollars. This can be expected to reflect over two or three-quarters of financial reports from the South Korean company.

Other problems & beneficiaries

There's also the major loss in income from not having the Galaxy Note 7 on sale. The phablet was expected to match or exceed the overall sales of the recent Galaxy S7 and S7 Edge. With the Note 7 officially removed from the market, there was room for other competing companies to pick up on potential sales. Google's Pixel XL was one of the obvious beneficiaries with a lot of analysts and phone experts promoting it as an alternative.

Samsung is slowly recovering

While the short-term financial damage is not welcoming at all, Samsung is slowly getting up from its major collapse from the Note 7 failure. The company is not losing the amount of ground to the competition that most have thought. With the next flagship launch of the upcoming Galaxy S8 still some months away, it is definitely a positive sign for Samsung's management that the Note 7 damage will not last long and will weather off once the S8 will officially be released.

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