Samsung, maker of the Galaxy Note 7, has been under fire for issues with their flagship phone overheating, melting,and outright exploding. After a voluntary recall, more batteries went through the same problem. Now, reports are saying Samsung has no idea what’s wrong with the Galaxy Note 7. Just how bad are things for Samsung right now?
Samsung Fights Over Note 7 Fallout
Samsung is feeling the heat – and not just from the Note 7 explosions. Customers are angry, retailers refuse to carry the Note 7, and the phone isn’t even allowed on airplanes when powered on. Does Samsung survive this nightmare? Just how bad is it?
Samsung originally said it was “temporarily adjusting the production schedule” for the phone when pausing production. Now, the company has officially ceased making the Galaxy Note 7. Samsung will lose at least $2.3 billion in revenue as a result. But more than the lost revenue is the hit to the company’s reputation.
Samsung trades on the Korea Exchange. Even with initial problems for the Note 7, Samsung share price hit three all-time highs in August, yet dropped 8.9 percent after news of stopping production on the Note 7 was announced. And since that confirmation came after close of day, shares will likely plunge lower. With Apple scouting locations in South Korea, this is a bad time for Samsung to lose ground in its own backyard.
Samsung owns 22.4 percent of the smartphone market – almost double Apple’s 11.8 percent market share. However, Samsung’s big hand was the now defunct Galaxy Note 7. And while Samsung most likely won’t lose its lead in the market, the company could easily see its lead over Apple halved. The biggest piece here is brand reputation, which is often interpreted as market share. But it’s more than that. Apple has lifelong fans. So does Samsung. These users trust their brands and buy the latest and greatest devices put out by them. So when their lifelong brand finally lets them down in such a big way, there’s a good chance they go to the competition.
What does it take to make Galaxy Samsung Note 7 to explode? Know it here with Mashable.
Samsung is an innovative company with fitness tech, TVs, computers, flash drives, OLED screens…. The list goes on and on. The fact is, Samsung will be fine. But as far as their smartphone market share goes, it’s about to take a hit.
With the official halt to production of the Galaxy Note 7, look for Apple (AAPL) shares to rise.
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