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Samsung Galaxy Note 7 dead, Sammy may suffer $15 billion loss

ViewsHeadlines Tech Correspondent,

Samsung Galaxy Note 7 smartphone or phablet was expected to be the best offer from the Korean tech giant. It was expected to put Cupertino based Apple in its place and decimate iPhone 7 and iPhone 7 Plus. But things have gone horribly wrong for the biggest smartphone maker in the world.

After weeks of humiliation, drubbing, attacks and counter attacks, besides dozens of incidents of Note 7 battery explosions, the tech giant has announced halting the production of its flagship handset that was expected to rule the market.

The company was forced to recall close to two million handsets across the world in the wake of incidents of Galax Note 7 batteries explosions. Many airline companies banned using the beautifully made smartphones on their aircraft giving very bad publicity to the tech giant.

galaxy-note-7

The latest episode with Samsung has badly impacted its Note brand, the best Samsung handsets. There are many analysts who claim that the ‘battery gate’ may destroy the Note brand completely. There is no denying the fact that it was the closest competitor of Apple’s iPhone and gave very tough fight to the Cupertino based company’s top offerings. But this is a thing of past now and the Cupertino based tech giant is seeing many long-term Samsung fans converting into iPhone fans.

The announcement that the company has suspended Note 7 production saw Samsung’s share price plunge by 4 percent. Reports suggest that the company has now permanently suspended production of its Galaxy Note 7 smartphones following reports of fires in replacement devices, according to South Korean media. Latest move is a further setback for the technology giant in the midst of its worst ever phone recall crisis.

Latest reports suggest that the mounting instances of Samsung Note 7 battery explosions had forced the company’s hands in this regard. The Yonhap News Agency reported that Samsung’s decision to halt Note 7 production was done in cooperation with authorities in China and the United States, citing an unnamed source at a Samsung partner company.

Death of a brand

There are fears that if Samsung fails to come up with a winning strategy to solve the issue, it will kill Note brand in the world market.

Renowned brand and reputation expert Eric Schiffer while talking about it says, “If the Note 7 is allowed to continue it could lead to the single greatest act of brand self-destruction in the history of modern technology”. Schiffer is the chairman of Reputation Management Consultants.

He goes on to add “Samsung should arrest the sale of Note 7’s and protect the safety of their clients before profits and ultimately as a byproduct protect Samsung. Samsung needs to take a giant write-down and cast the Note 7 to the engineering hall of shame next to the Ford Pinto.”

In another bad news for the Korean smartphone major, US telecommunications firm AT&T and German rival T-Mobile said they would halt exchanges of recalled Samsung Galaxy Note 7s pending further investigations. The announcement saw Samsung’s share price plunge by as much as 4 percent in early morning trade on Monday – even before the Yonhap report came out.

How much Samsung lost due to Note 7 fiasco?
There are reasons to believe that Samsung has lost substantially not just in term of loss of face and faith in it, but also financially too. It is being estimated that the tech giant has lost from $2 billion to $5 billion till now and may eventually lose $15 billion. It had spent huge sum of money on its promotion. All this has gone down the drain now. “Analysts are saying [the recall] could cost between $2bn and $5bn, and that was even before this latest development,” said Fawcett, adding that some 2.5 million phones worldwide would need to be replaced.

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