Samsung permanently discontinues the Galaxy Note 7, $17 billion in sales lost
It wasn’t long ago that Samsung was calling the projected $1 billion dollar cost of the first Galaxy Note 7 recall a “heartbreaking amount”. But with Samsung just now announcing it is permanently discontinuing production of the Galaxy Note 7, the company is facing a massive $17 billion dollars in lost sales revenue. The news comes just one day after Samsung put a global stop on sales of the defective device.
Samsung confirmed the official discontinuation of the Galaxy Note 7 line in a filing with South Korean regulators today. In the filing, the company said:
Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7.
Analysts cited by Reuters came up with the $17 billion dollar figure, based on lost sales of the 19 million Galaxy Note 7 units Samsung had originally expected to sell during the device’s lifetime. The figure is a drastic increase from the $5 billion dollars analysts predicted the original recall would cost the company. Samsung is also facing up to $1.6 trillion Won in disposal costs if 4 million-odd Note 7’s need to be safely disposed of.
With the discontinuation of the Note 7 made official, Samsung will lose a full half-year of flagship smartphone sales on top of the disposal and compensation costs associated with the recall. Samsung produces a lot more phones than just flagships, but the profit margin on flagship devices is much more significant than on mid-range and entry-level models.
It wasn’t long ago that Samsung was calling the projected $1 billion dollar cost of the first Galaxy Note 7 recall a “heartbreaking amount”. But with Samsung just now announcing it is permanently discontinuing production of the Galaxy Note 7, the company is facing a massive $17 billion dollars in lost sales revenue. The news comes just one day after Samsung put a global stop on sales of the defective device.
Samsung confirmed the official discontinuation of the Galaxy Note 7 line in a filing with South Korean regulators today. In the filing, the company said:
Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7.
Analysts cited by Reuters came up with the $17 billion dollar figure, based on lost sales of the 19 million Galaxy Note 7 units Samsung had originally expected to sell during the device’s lifetime. The figure is a drastic increase from the $5 billion dollars analysts predicted the original recall would cost the company. Samsung is also facing up to $1.6 trillion Won in disposal costs if 4 million-odd Note 7’s need to be safely disposed of.
With the discontinuation of the Note 7 made official, Samsung will lose a full half-year of flagship smartphone sales on top of the disposal and compensation costs associated with the recall. Samsung produces a lot more phones than just flagships, but the profit margin on flagship devices is much more significant than on mid-range and entry-level models.
Full article : Android Authority
