Samsung permanently discontinues the Galaxy Note 7, $17 billion in sales lost

**Tabs** · 10-11-2016, 06:45 PM

You know, yes, I mean it can be.

Look, the bottom line is, batteries fires have always been an risk, regardless of the electronic device... although I also agree that the fire risk with the latest batch of batteries used in the Note 7 is indeed alarmingly high.

If you put aside this fluke, and look at how the stock market has beaten up this stock over it, and add in the idea that this is honestly a fluke as Samsung has been making premium handsets for quite a while now and will continue to do so, then yeah, I would say go ahead and buy the dip.

Just one thing to keep in mind though: The opportunity cost of lost sales is going to be astronomical: In fact, OP's article repeats what I have read elsewhere as well, and they are stating $17 billion. That's not pocket change. Also, we have to factor in the incalculable loss of a pretty sizable smear on the brand name. I believe that they can recover though, but it could take longer than anticipated. At least past this generation.

Finally, Samsung is ADR, so I would keep that in mind as well.

If you truly want to bet on a foreign dark horse, want to place some on HTC? They're involved with Steam's Vive, as well as Google's Pixel. Those two are no joke. Pixel's very black editions have already sold out.

Anyways, just some late night ramblings....

**Magnificence** · 10-18-2016, 08:18 AM

Originally posted by james.hendrickson View Post

A possible buying opportunity?

From the Web:
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It wasn�t long ago that Samsung was calling the projected $1 billion dollar cost of the first Galaxy Note 7 recall a �heartbreaking amount�. But with Samsung just now announcing it is permanently discontinuing production of the Galaxy Note 7, the company is facing a massive $17 billion dollars in lost sales revenue. The news comes just one day after Samsung put a global stop on sales of the defective device.

Samsung confirmed the official discontinuation of the Galaxy Note 7 line in a filing with South Korean regulators today. In the filing, 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.

Analysts cited by Reuters came up with the $17 billion dollar figure, based on lost sales of the 19 million Galaxy Note 7 units Samsung had originally expected to sell during the device�s lifetime. The figure is a drastic increase from the $5 billion dollars analysts predicted the original recall would cost the company. 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 the Note 7 made official, Samsung will lose a full half-year of flagship smartphone sales on top of the disposal and compensation costs associated with the recall. Samsung produces a lot more phones than just flagships, but the profit margin on flagship devices is much more significant than on mid-range and entry-level models.

The true damage to the Galaxy Note brand will only be revealed in time, but as Reuters reports, the decision to scrap the Note 7 entirely was intended �to limit the financial and reputational damage� to the company.

While Samsung as a whole is ultimately large enough to absorb the costs of the Note 7 fiasco, some analysts claim Samsung might have to cut fourth quarter mobile division profit estimates by as much as 85 percent. Samsung ....

Just read that they ve banned it from all flights with Singapore airlines. the S7 debacle will do a lot of damage to the korean giant.

Samsung permanently discontinues the Galaxy Note 7, $17 billion in sales lost