Forget $1 billion, Samsung could lose as much as $17 billion on terminated Galaxy Note 7 sales

Remember when the first Galaxy Note 7 recall was estimated to cost Samsung roughly $1 billion, which Koh Dong-Jin, the tech giant’s mobile division president, deemed a “heartbreaking amount”?

It turns out those were still the days for the world’s most popular smartphone vendor, which somehow managed to offset initial losses incurred by the explosive phablet for the September-ending quarter with stellar performance from its various component businesses.

In the meantime however, the prospect of an unprecedented second global recall and effective sales termination for good has begun to loom large, as way too many “safe-to-use” new units have spontaneously combusted yet again for the reports to be unrelated or untrue.

Refreshed damage projections by a number of very knowledgeable financial analysts are now in, and as you might expect, they’re far worse than last month, when there was still hope for the Galaxy Note 7. The product likely to be found “fundamentally flawed” in the US CPSC’s latest in-depth investigation could bleed as much as $17 billion, the rough equivalent of “up to” 19 million copies Samsung had rightfully expected to sell.

That humongous figure doesn’t even include a separate 1.6 trillion won ($1.4 billion) in Q4 “disposal costs”, not to mention the company’s forthcoming market value plunge, and long-term reputation and brand impact impossible to evaluate at the moment.

Some pundits go so far as to say Samsung may well “go the way of Nokia and BlackBerry” if disgruntled customers aren’t offered “some form of compensation”, but if you ask us, that feels like a bit of a stretch.

Source: Reuters

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About The Author
Adrian Diaconescu
Adrian has had an insatiable passion for writing since he was in school and found himself writing philosophical essays about the meaning of life and the differences between light and dark beer. Later, he realized this was pretty much his only marketable skill, so he first created a personal blog (in Romanian) and then discovered his true calling, which is writing about all things tech (in English).