Samsung may spend as much as $1 billion to replace more than 2 million Galaxy Note 7 units that have been recalled globally, says a Bloomberg report. The report quotes Credit Suisse Group AG, Daishin Securities Co. and Pelham Smithers Associates who estimated the cost of the recall at around $1 billion or less. “Still, the estimated impact only represents less than 5 per cent of Samsung’s projected net income of 23 trillion won ($20.6 billion) this year,” the report adds.
The Korean smartphone maker recalled Samsung Galaxy Note 7 units last week, amid reports of its battery exploding for some users. Samsung said sales of Galaxy Note 7 device have been stopped considering the safety of users.
Samsung issued a statement saying 35 such cases have been reported globally and that the company is conducting a thorough inspection to identify affected batteries. Samsung is offering Galaxy S7 or Galaxy S7 edge smartphone in exchange of Galaxy Note7 for users who’ve already bought the smartphone.
Samsung’s statement reads, “To date (as of September 1) there have been 35 cases that have been reported globally and we are currently conducting a thorough inspection with our suppliers to identify possible affected batteries in the market. However, because our customers’ safety is an absolute priority at Samsung, we have stopped sales of the Galaxy Note7. For customers who already have Galaxy Note7 devices, we will voluntarily replace their current device with a new one over the coming weeks.”
Though reports of battery explosions account for less than 0.1 per cent of the volume sold; carrying Galaxy Note 7 is a potential risk. This is a serious hazard, more so since smartphones are carried by users everywhere, including flights.
Samsung galaxy Note 7 was launched early August in India. The smartphone hasn’t started shipping in the country yet, even though company took pre-orders right after its launch. Now, with the battery issues, we’ll have to wait and watch when the device finally starts selling for Indian users. Samsung Galaxy Note 7 is company’s flagship device and comes with top of the line specifications. It is priced at Rs 52,990. The Galaxy Note 7 comes with a 5.7-inch Quad HD dual edge Super AMOLED display, 4GB RAM, 64GB storage, and iris scanner for security, along with a new S-Pen. The battery is 3,500 mAh with fast charging technology.