[News] Samsung Galaxy Note 7 recall could cost $1 billion

[StyM]

http://www.fudzilla.com/news/mobile/...cost-1-billion

The Samsung Galaxy Note 7 recall sounds like one of the biggest in the last few years and it looks like the company has to recover as many as 2.5 million phones from its customers. This is likely to cost Samsung close to a billion dollars and it will eat up any potential profits it was making from these phones.

Fudzilla reported about the Galaxy S7 catching fire, and unfortunately this was not an isolated case, it happened over and over again, to at least 35 people.

Bloomberg reported that about three dozen of the devices were found to have batteries that ignited and exploded. This is a lot of phones and initiated the biggest recall in Samsung?s recent history.

Credit Suisse estimates that Samsung Electronics gets about $600 revenue and $108 of operating profit for every Note 7 it sells. Of course, after the recall, this money will be burned up by shipping and replacement costs. Doing a quick sum and assuming that the 2.5 million Note 7 number is close to the real number, Samsung will directly lose most of the $272.5 million profit that it gained from the sales of these devices.

The worst part is that after an excellent run with the super popular Galaxy S7 phones, Samsung is damaging its reputation, and this happens just days before Apple releases the iPhone 7.

Samsung said that it will replace your Note 7 with either another Note 7 or alternatively with Galaxy S7 or S7 edge, and it will refund the difference. Most of the sales affect USA and Canadian customers while the sales were halted in most European countries before the devices started shipping on September 2.

For the US customers it is not clear when they will get a replacement Note 7 if they still want to use that device. It might take days or weeks and some carriers will give customers a comparable device in the meantime, and some, it's been reported, even waived a restocking fee for their customers.

It is crystal clear that the damage to the brand and reputation is something that will cost more than money and it will make people think twice before they buy another Samsung mobile phone in the future. This will be hard to fix, but Samsung is doing the best it can to repair its damaged phones, brand and reputation.

[StyM]

[Sparky]

Things I wonder:

Is the fault in the battery, or the charging circuits? (particularly the rapid charge)
If it is the battery, who made the battery?

Just curious who ultimately is to blame.

[kromosto]

from what i read it is 99% battery

[Buckeye]

It's a wise move, tho costly, to do a recall. They addressed this issue very fast which gives good PR standing IMO.

Not like some other cell phone makers that just say tuff.

If it is just the battery then they stand a good chance at recovery with recalls, simply replace the batteries, test and send back out.
If its the charging circuit then maybe a firmware update might fix the problem ?

[StyM]

[zanzabar]

Things I wonder:

Is the fault in the battery, or the charging circuits? (particularly the rapid charge)
If it is the battery, who made the battery?

Just curious who ultimately is to blame.

what if it is both, this is the first main stream non nexus with native type C charging (there is the new one plus and some huawei,) that makes me wounder if the charging circuit just pushes more power than the battery can take and the battery controller in the package is not managing it correctly.