Note 7 Debacle to Cost Samsung $3 Billion in Lost Sales
Samsung has officially weighed in on its expectations for the financial loss caused by the Galaxy Note 7. In a press release, the company said it expects a ‘mid-3 trillion won’ (roughly $3 billion) deficit from the Note 7 in Q4 2016 through to Q1 2017.
It expects most of the lost sales (about $2.2 billion) to hit the bottom line next quarter, and the remainder in the first quarter of 2017.
After weeks of incidents involving the phone catching fire, Samsung officially killed the device for good on Monday. It initially insisted the replacement phones were safe, but after reports that they were catching fire as well Samsung announced that it would scrap the model entirely.
Samsung said: “Moving forward, Samsung Electronics plans to normalise its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge.” It also vowed to “focus on enhancing product safety for consumers by making significant changes in its quality assurance processes”.
All US Note 7 owners can exchange their devices for another Samsung smartphone or receive a refund under the plan approved by the CPSC, the company and agency said on Thursday. Customers who exchange the Note 7 for a Samsung device will receive a $100 credit; those opting for an alternative brand will receive $25 credit.