Samsung may spend as much as $1 billion on Note 7’s recall: Report
This recall could have a major impact on Samsung’s brand!
Samsung’s recall of millions of Note 7 smartphones is not going to be cheap. The company has stated that the amount is “heartbreaking”. Samsung SDI Co Ltd said that while it was a supplier of Galaxy Note 7 batteries, it had received no information to suggest the batteries were faulty. Several people posted images and videos of charred Galaxy Note 7s online and said their phones had caught on fire.
According to a report by Bloomberg, the company will be replacing all of the 2.5 million devices it sold in the past two weeks. Sales have been halted in 10 countries where the smartphone is available. Estimates from Credit Suisse Group AG, Daishin Securities Co. and Pelham Smithers Associates have reportedly put the recall’s cost at around $1 billion or less.
Samsung was counting on the Galaxy Note 7 to maintain its strong mobile earnings momentum against Apple new iPhones which will be unveiled on Wednesday. "This is some major buzz-kill for Samsung, especially given all of the hard-earned excitement that products like the Note 7 have been garnering lately," IDC analyst Bryan Ma said. "The pending Apple launch puts all the more pressure for them to contain this quickly. The timing of this couldn't have been worse."
The company has also announced that it will start exchanging the device as soon as next week or users could swap their Galaxy Note 7 for a Galaxy S7 or S7 Edge.