Analysts predict Samsung could lose $17 billion in revenue if the Note 7 is discontinued
Things have just gone from bad to worse for Samsung. Over the weekend several reports of “safe” Galaxy Note 7 devices erupting into flames were reported, prompting all four major US carriers to halt sales of the device. Samsung reportedly halted production of the Galaxy Note 7 and yesterday, the company issued a statement saying all current Galaxy Note 7 devices should be powered down and returned, no matter their status.
Now analysts believe this fiasco could cost the company as much as $17 billion once it’s all said and done. Samsung says it is conducting an investigation into what causes the fires, but the company is also under investigation by US safety regulators. Because of this, some analysts are predicting that Samsung will completely scrap the Galaxy Note 7 and will move on to other models to limit financial and reputation damage.
Analyst Song Myung-sub says the worst case scenario for Samsung is that those US regulators could conclude the Galaxy Note 7 is a flawed product and completely ban sales of the device. If that were to happen, lost sales from the expected 19 million Galaxy Note 7 devices would mean a total loss of more than $17 billion in revenue for the company.
Edward Snyder, the managing director of Charter Equity Research believes this may just kill the Note 7 brand.
“By the time they fix the problem they have to go through recertification and requalification and by the time that happens, they’re going up against the (Galaxy) S8 launch.”
What do you think? This is the second major recall of the device in the same amount of months. If Samsung doesn’t completely ditch the Note 7 name altogether, will you be getting another one if this mess is finally sorted out? Or have you already moved on to another device?