Samsung estimated to spend US$1 billion to replace 2.5 million Galaxy Note7 units
Bloomberg estimates that Samsung will spend as much s US$1 billion to replace 2.5 million units of the Galaxy Note7.
This image of a burnt Note7 first appeared on Baidu.
Samsung made a swift decision last Friday to halt sales of the Galaxy Note7 and offer a replacement device for every unit sold, but it is estimated to be pricey.
According to Bloomberg, Samsung could spend as much as US$1 billion to replace all of the 2.5 million units of the Galaxy Note7 which were shipped since its launch. Koh Dong Jin, the head of the mobile business at Samsung, reportedly said during the press conference that the financial impact was "heartbreaking".
While it only constitutes less than 5% of the projected net income for the company this year, the potential damage to the reputation could be far greater than the financial losses. Moreover, Apple's upcoming iPhone 7 launch this week could inflict more losses for Samsung.
“The time advantage that they had on the iPhone, that’s evaporated now,” said Bryan Ma, an analyst at IDC in Singapore. “It’ll hit them this quarter obviously, but if it’s something they immediately address and immediately turn around, then there won’t be a long-term impact.”
Samsung Mobile Singapore is expected to share more details about the replacement process sometime this week.
Source: Bloomberg
Our articles may contain affiliate links. If you buy through these links, we may earn a small commission.