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Samsung's Galaxy Note 7 recall could cost as much as $1 billion

By Shawn Knight
Sep 5, 2016
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  1. Unless you’ve been living under a rock for the past week, you’ve no doubt heard about Samsung’s decision to recall the millions of Galaxy Note 7 smartphones sold since launching August 19. As you can imagine, recalling a major product on a global scale won’t come cheap.

    According to a report from Bloomberg, Samsung has shipped roughly 2.5 million Galaxy Note 7 smartphones since launch (all of which are being recalled). The publication estimates the recall could cost the South Korean electronics giant as much as $1 billion.

    As it stands today, Samsung does have a few things going in its favor. Because it announced the recall on Friday after the market closed, investors have had a couple of days to let the news sink in. What’s more, addressing the matter as rapidly as Samsung did will no doubt win some fans over as it shows the company puts a lot of value into the safety of its products and the customers that buy them.

    Galaxy Note 7 owners in the US are urged to take advantage of Samsung’s new Product Exchange Program. Participants can choose to turn in their current Note 7 for a new unit that should be available sometime this week. Optionally, buyers can exchange the faulty device for a Galaxy S7 or Galaxy S7 Edge and return any Note 7 accessories for a full refund.

    What’s more, Samsung is offering those impacted a $25 gift card or bill credit through select carrier retail outlets. More details on the US Product Exchange Program can be found on Samsung’s website.

    The timing couldn’t be worse for Samsung. Following several quarters of sliding sales, the Galaxy S7 and S7 Edge helped the company achieve its highest profits in two years. The Galaxy Note 7, with its exceptional display, was expected to further boost Samsung’s status in the cut-throat smartphone industry.

    Samsung even moved the launch up by several weeks in order to beat the iPhone 7 to market but with the recall now under way, it’ll be interesting to see how the quarter plays out considering Apple’s upcoming device likely will only feature incremental updates compared to its current-generation offerings.

    Damage images via Android Authority

    Permalink to story.

     
  2. VitalyT

    VitalyT Russ-Puss Posts: 3,154   +1,429

    Just enough to patch the pants it burnt through. Thanks a bunch!
     
    Hexic, wastedkill and Trillionsin like this.
  3. Trillionsin

    Trillionsin TS Evangelist Posts: 1,318   +134

    lol, but what if it was like, in your car? Or under your pillow or something? I mean, I'm not sure who charges their phones in their pockets! lol Actually, I have.... with a samsung portable battery charger.


    Anyways
    Speaking of the recall...
    This is really the best move Samsung could have made, dont you think? Sucks they slacked on the quality control in the first place, but they did the next best thing, I guess..
     
    MonsterZero likes this.
  4. ikesmasher

    ikesmasher TS Evangelist Posts: 2,556   +862

    Not really a slack in quality control as much as a freak accident. You cant exactly open up batteries and look at them, and this only happened to <50 devices with several million shipped.
     
  5. Darth Shiv

    Darth Shiv TS Evangelist Posts: 1,621   +376

    In the original story, they stated in < 0.1% which is less than 1 in 1000. 50 in x million is a big leap from there.
     
  6. Kenrick

    Kenrick TS Booster Posts: 187   +88

  7. ikesmasher

    ikesmasher TS Evangelist Posts: 2,556   +862

    https://consumerist.com/2016/09/02/...te-after-reports-of-battery-explosions-fires/

    "Now Samsung tells the Wall Street Journal that it has thus far heard of 35 cases of this battery problem. It estimates that around 24 phones out of every million units is faulty."

    So I wasnt exactly right but point stands. Not exactly the most credible source but the first I could find that repeated the same info I found elsewher
     
  8. Uncle Al

    Uncle Al TS Evangelist Posts: 1,669   +777

    Cost $1 billion today, but will make up in $10 billion in future revenue. You've certainly never seen Motorola or AT&T ever do that without a lot of prompting and complaints from consumers ....
     
    Reehahs, Darth Shiv and MoeJoe like this.
  9. ForgottenLegion

    ForgottenLegion TS Enthusiast Posts: 57   +27

    But Samsung can't you just get customers to check the battery pack to see if they're affected and ship them out a replaceme.... oh wait yeah I forgot. You sealed the battery in ala Apple. Planned obsolescence. Gotcha. My bad.
     
  10. Alpha Gamer

    Alpha Gamer TS Guru Posts: 330   +93

    This article just assumed my place of residence. Triggered!
    Time to buy some samsung shares...
     
    Hexic and MonsterZero like this.
  11. RustyTech

    RustyTech TS Guru Posts: 865   +434

    If Samsung re-released these refurbished phones with removable batteries, I'd buy one :D
    Just replace the back glass cover with a plastic one..which will make it a bit thicker, and cash in!
     
  12. MonsterZero

    MonsterZero TS Addict Posts: 228   +88

    I thought the same thing until I read their process to deal with the defect.

    The problem dealing with the consumer reports for this return is they have to immediately halt sales of all devices and once the problem is corrected they have to submit a case to have the injunction of sales removed. This makes the whole process long and cumbersome, and I myself am looking to have my phone replaced next week, not in 6 months.
     
  13. EClyde

    EClyde TS Guru Posts: 707   +181

    Unless you have been living under a rock Shawn you should know that that sentence is as dumb and dated as The Simpsons. Time to use your noodle
     

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