According to Some analysts, the whole exploding phone debacle will translate into lost sales of up to 19 million units over what could have been the life cycle of the Note7. That apparently amounts to around $17 billion of money that Samsung won’t get.
After the first recall of the Note 7 started in early September, the estimate for lost sales (combined with the cost of the recall itself) only reached around $5 billion. But that was back when everyone still thought Samsung would continue selling the Note7 and that the replacement units handed out to people were safe and wouldn’t catch fire too.
It is no longer news that Samsung has resolved to stop the production of the Galaxy Note 7 permanently. If the above analysts are to be trusted with figures, it translates that sending might be able to weather the storm after all.
The smartphone giant has a $235 billion market value and $69 billion in cash and equivalents (both numbers from the end of June), they can certainly afford to take this hit. Not a lot of companies in the mobile space can say that (the obvious exception being Apple of course).
However, there’s one thing else that is damaged – the reputation. It isn’t rocket science to know that the brand, Samsung have really dwindled in terms of its reputation. I have come across a handful of people who wouldn’t touch a Samsung phone – not even with a ten foot pole. We can only hope for them to devise better strategies to build trust in their brand again.
My personal thoughts on this debacle would be for Samsung to stop the Note series entirely and any Note 7 successor preparing to be launched should be given a different name. Well, what do I know after all?
Do you know what we can’t still fathom?
The fact that Samsung is still scrambling to figure out the cause of the battery fires and to explain how a company known for manufacturing expertise could have missed such a critical product flaw twice. Samsung originally blamed one battery supplier for the problems and switched to an alternative company, but it is now investigating the issue again.
“It must find the cause and clearly say what it will do about it,” said Yoo Jong-woo, an analyst at Korea Investment & Securities Co. “That way customers won’t feel uneasy when buying other Samsung phones”, because right now, everyone does.
This saga is actually a major setback especially against long time rivals, Apple Inc.