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A $17-bn hole in pocket
SEOUL: Samsung Electronics’ worst-ever recall could cost the company as much as $17 billion.
SEOUL: Samsung Electronics’ worst-ever recall could cost the company as much as $17 billion.
On Tuesday, the company told mobile carriers to stop sales or exchange of the $882 (almost ₹60,000) device and asked users to shut off their phones while it investigated new reports of fires in replacement Note7s.
“(We) have decided to halt production and sales of the Galaxy Note7 in order to consider our consumers’ safety first and foremost,” the South Korean firm said in an exchange filing.
The news hit Samsung’s share price, which closed down 8.0% on the Seoul Stock Exchange.
If Samsung stops selling the Note7s, that will translate into lost sales of up to 19 million phones, or nearly $17 billion (₹1.14 lakh crore), that the firm was expected to generate during the Note7’s product cycle, according to analysts.
The cost — $17 billion — is the expected size of India’s smartphone industry in 2017 according to Counterpoint Research.
That’s a big increase from $5 billion in missed sales and recall costs analysts initially expected Samsung to incur.
