The world’s largest smartphone maker just got majorly embarrassed. Just one month after releasing the Galaxy Note 7 smartphone, Samsung has recalled their flagship phone series. What does this mean for Samsung? Who benefits from this?
Samsung Note 7 Explodes – Market Takes Note
Samsung (SSNLF) announced Friday it had found a problem with the battery in some of the Note 7 phones and is halting sales in 10 countries, including South Korea and the United States. Samsung has already sold 2.5 million of the phones, and must now recall the majority of sales.
The company also announced it will replace user’s devices with new products. However, the recall will take 2 weeks to begin, leaving many customers in an awkward position.
Chinese phones were not affected as company used another battery, though Chinese models may still be recalled, as well. Samsung has already received dozens of alerts worldwide about phones catching fire while charging. The company announced it found 24 devices for every million units sold.
U.S. mobile networks sell the Galaxy Note 7 for at least $850. Company executives declined to comment on exactly how much replacing all the devices would cost.
“It is a big amount that is heartbreaking,” said Koh Dong-jin, president of Samsung’s mobile communications business.
The phone, which received stellar reviews, was expected to keep or grow Samsung’s 22 percent market share going edge over Apple’s 12 percent market share. Samsung’s recall couldn’t have come at a worse time, with Apple unveiling its iPhone 7 and iPhone 7 Plus smartphones in the next week.
While the recall is a huge embarrassment for Samsung, it’s great news for Samsung’s archrival, Apple.
The average US investor has a particularly difficult time acquiring Samsung shares on the Korean exchange. However, anyone who does have shares should drop them. Immediately.
Apple (AAPL) has already seen a bump in share price as a result of the news, and should see a nice spike after next week’s big reveal of the iPhone 7 smartphone.
Watch this video about the Samsung Galaxy Note 7 by Ariel Gonzalez
Samsung will be fine in the long term, but is about
to take a beating for the next few months.
Apart from Samsung, Apple is also facing its own problem with European Commission. Want the full story? Check this news here!
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