Samsung mentioned the first Galaxy Note 7 recall which costed $1 billion as “heartbreaking amount”. But now the company has announced they are permanently discontinuing the production of Samsung Galaxy Note 7. This will hit the company with a massive $17 billion loss in sales revenues. This news came right after Samsung put a global stop on the sales of defective devices.
Galaxy Note 7 Permanently Discontinues
The battery defect was causing the device battery to overheat and catch fire. The company provided replacement for defective smartphones, but the ‘safe’ marked Note 7 also began to catch fire.
The company said
“Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7.”
Samsung expected a sale of 19 million Galaxy Note 7 units during the device’s timeline, but they end up with $17 billion loss. Samsung is also facing up to $1.6 trillion Won in disposal costs if 4 million-odd Note 7’s need to be safely disposed of.
With the discontinuation of Samsung Galaxy Note 7, the company will lose a full half year of flagship smartphone sales. Samsung does manufacture a lot more devices than flagships, but a major margin of profit is made from the flagship sales.
If this situation was affected to another smartphone company, it might more likely mean the end of its mobile business. But Samsung is ultimately large enough to absorb the costs on Note 7. Samsung will get back on track soon, but it will take some time for a full recovery.
This id going to help the sales of Apple iPhone 7, iPhone 7 Plus and the new Google Pixel Smartphones. They are not replacements for the Galaxy Not 7 in terms of features. But most people will definitely consider the Google Pixel smartphone which also comes in the same budget.