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Samsung Electronics Limited Loses Up To $5.3 Billion due to Galaxy Note 7

The South Korean smartphone giants faces huge loses from the Note 7 Fiasco, as the dust starts to settle from the fire

Samsung Electronics Limited Loses Up To $5.3 Billion Image Credits: Yahoo Finance || Samsung Electronics Limited Loses Up To $5.3 Billion

Samsung Electronics Co. Ltd. (OTCMKTS:SSNLF) can lose as much as $5.3 Billion due to all the problems its Galaxy Note 7 has caused. The explosive smartphone would cost the company around $3 billion and would further cost another $5.3 billion after taking into account the costs of the recalls.

Back in August 2016, Samsung claimed that the Galaxy Note 7 is one of the most perfect smartphones ever built. Right after its launch, the company’s stock reached an all-time high. However, its fate soon took a sharp turn.

For Samsung, problems began when the social media was flooded with images of the Note 7 catching fire and exploding. Multiple incidents were reported by Note 7 users which caught the eye of many. Instead of addressing the situation at an early stage, Samsung let things to take their course.

Just a month later, the company was forced to recall around 2.5 billion units worldwide. Samsung was bound to take such an action as the explosive smartphone had become a fatal problem. The incidents that this smartphone has caused has involved and affected many authorities and airlines alike.

Samsung had apologized for the explosions. It stated that customer safety has always been its top most priority. The company hired independent experts to test the battery of the device after reports that stated that a defective battery causes the new Note to explode.

The company had cleared the battery of all faults and replaced the units with phones which would not cause any problem for the customers. Even then, reports emerged about replacement units exploding again, which forced Samsung to halt production and asked the users to return their phones to the company.

The phone has caused Samsung’s shares to be wiped out, which were supposedly valued at $18 billion. It has also lost around $25 billion in market value, which has gone in favor of its rival, Apple Inc. Analysts who cover Apple stock are optimistic, as they expect the stock to go as high as $126.45 by 2018.

The Country Caller believes that the South Korean giant may find a way to return soon with another flagship device to lead the smartphone industry. It has already started working on its next product, which could hit shelves as soon as February. However, it would need extra caution to keep its next smartphone from blowing up.

 

Source: http://www.thecountrycaller.com

(This Story has been completely carried over from http://www.thecountrycaller.com and NewsToay.Buzz has not edited the content)

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