There are numerous reports concerning how the Galaxy Note 7 recall and subsequent cancellation will affect Samsung and its competitors. Lots has been said, but do the often disparate ideas have an overarching narrative? Let’s have a look.
What’s more, Samsung has incentivized replacing the Note 7 with its own products by supplying refunders with a $100 coupon should they take another Samsung product instead. Samsung is already ramping up production of previous Galaxy devices in anticipation of this.
Leaving or staying?
In keeping with the notion above, large numbers of those returning the Galaxy Note 7 are reportedly replacing it with a Samsung phone, rather than a competing device by the likes of Apple, LG or Google. On this side of the fence, analysts claim that it is not prudent “to assume Apple will benefit materially as a result” of Samsung’s misfortune.
Though some reports are advising that most users are staying loyal to Samsung, others suggest that Apple stands to gain somewhere between 5-7 million users from Note 7 owners defecting to the iPhone 7. In support of that claim, Apple’s iPhone 7 and iPhone 7 Plus inventory is reportedly low right now and the Apple store indicates a 3-4 week wait for delivery of the larger model.
With Apple being Samsung’s closest competitor and also offering a big luxurious phone at a similar price point, the speculation is justified. If a person feels jilted by Samsung they may move to Apple out of spite, but they may also move simply because it’s their next best option.
How much will Samsung lose?
Current estimates suggest that Samsung could lose anywhere from $2.4 billion to $24 billion from the Galaxy Note 7 fall out, but these numbers are quite difficult for onlookers to measure. You could count physical units sold and returned, promotion costs, disposal, compensation, manufacturing and salaries, if you had access to all of that data. But the ‘cost’ doesn’t really stop there.
The Galaxy Note 7 could damage Samsung’s reputation, stock prices, future business decisions and more. This will take a toll on the infrastructure with a cumulative effect that’s impossible to calculate. It’s safe to say that while these figures make for good headlines, they are ultimately just guesses – quite often put out by analysts looking to get their name in the paper.
Essentially, what can be gleaned for certain from all of the rhetoric is that Samsung stands to lose some money from the Galaxy Note 7 debacle. Somewhere between a fridge magnet’s worth and enough to finance Elon Musk’s Mars colonization plans. Likewise, those who are returning the Note 7 are sticking by Samsung, except for the millions who aren’t. Finally, someone stands to benefit from all this, we’re just not sure who yet.