This has gone from kind of funny to pathetic and scary. Their margins must be razor thin right now trying to compete with Apple and shield their losses with a quick fix that doesn't seem to work. Are we witnessing the death of Samsung's mobile unit? We may be if this report is true and it is a replacement or "safe" device. Given the iPhone 7, while having some cool new features and a beast of a processor, is largely within the same design aesthetic as the iPhone 6, with lower sales guidance given yet again for the upcoming quarter, this couldn't have been a better time for this to happen to Apple. If the 10th anniversary iPhone redesign (iPhone 8? iPhone Pro?) comes out next year as all the rumors seem to suggest, Apple should be able to pull into a commanding lead.
However, I also expect these Galaxy issues will give Google and their new Pixel phones a healthy boost. It's likely that some Android vendor will step in and fill a decent chunk of the void, but one must not discount that many average consumers equate Samsung with Android as Samsung is the dominate player on Android. These people are likely to transfer their brand perceptions from one to the other, negatively impacting Android in the process, through no fault of it's own. It's like how back in the day, Dell was Windows, and if you were having problems with your stupid Dell (like I did), you get fed up and abandon ship to Apple, even though Sony made much better Windows laptops when I switched. Combine the quirkiness and unrefined, laggy (yes, sometimes even still) nature of Android with faulty hardware, and the correlation becomes even stronger.