Problems with Note7 can cost $ 1,000 million to Samsung – Pplware

The last week was marked by the announcement of Samsung that sales of its new and highly anticipated Galaxy Note7 would be suspended and that the equipment already sold would be collected and replaced, to ensure the safety of their customers.

But this collection can be costly to the brand. Analysts point to cost in the order of one billion dollars!

After several complaints from users of the new Note7 related to the explosion of devices, Samsung volunteered immediately to realize the source of the problem and fix it. Quickly, sales were suspended and the company wanted to ensure that all equipment already in use will be replaced without affecting the user. According to Samsung, the problem is related to the battery cells, but not advanced any further information.

we’ve all had thought the costs that such an operation could bring to the company, but now industry analysts, more specifically, Credit Suisse Group AG, Daishin Securities Co. and Pelham Smithers Associates, estimated that costs stand at around one billion dollars.

Fortunately, not all equipment affected by the problem, yet the company has issued a recall about 2.5 million devices were shipped to stores in recent weeks.

According to Credit Suisse, Samsung is expecting to have an operating profit of $ 108 for each unit of the Galaxy Note7, in order to, by the end of the year, be able to sell between 8 to 9 million units. Therefore, one would expect a net profit between 864 and 972 million dollars. With this collection, it’s likely that Samsung has no profits with Note 7 this year.

Is this release a fiasco in terms of profits for the company?

There is a positive value, of course, but these cost a billion dollars represent only 5% of the profits that the company expects to earn over the next year.

the point is that the success of Note7 it was almost a given guaranteed it was completely put in question, even more so with Apple to launch its new iPhone this week. As we wrote, the timing for this problem could not have been worse for Samsung, because even the new iPhone do not live up to the usual hype that we know and that has irritated many with a lack of jack 3.5, this will always be better than one that potentially can you explode in the hands.