Galaxy Note 7 delay sees Samsung's market value drop by $7bn
According to a new report, the Galaxy Note 7's battery issue has not only descended the launch of Samsung's flagship phablet into chaos, but has also hit the company's market share to the tune of $7 billion. Though Samsung appears to have identified the issue — a faulty battery pack provided by one of its manufacturing partners — the company is still expected to announce a recall in the immediate future.
Numerous reports of Note 7 handsets exploding whilst on charge have cast a black cloud over what initially appeared the perfect roll-out. With 400,000+ units shipped in South Korea, things were going especially smoothly before, well, crashing and burning. A new report from Reuters has pointed out the swift drop in Samsung's MV, and with IFA delivering the usual conveyor belt of devices, this incident could hardly have been more ill-timed.
Only time will tell if Samsung can turn this launch around. But with some prospective buyers likely to swerve an $850 device that may or may not explode if charged, the potential long-term damage this could do to Samsung's PR and consumer trust will no doubt keep bosses awake for the time being.
Along with the slew of mostly Android manufacturers that could shift more units at Samsung's expense, there's also Apple, whose new iPhone 7 duowill be announced next week. Indeed, HDC Asset Management fund manager Park Jung-hoon believes it is inevitable that Samsung's anticipated H2 profits will take a big hit. In an assessment likely shared by many with financial interests in Samsung, he said:
Apple is supposed to show off the iPhone 7 next week and this issue has emerged, so the current state of things do not look good.
On a lighter note, it appears that only a small portion of Note 7 devices sold — supposedly less than 0.1 percent — have been affected. This should go some way to explaining why, out of nearly half a million sold, only a few have reported a problem. Additionally, it is not believed that launches beyond South Korea will be affected by the devices featuring rogue batteries, despite delays.
source: Reuters
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