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The president of Samsung has confessed that recalling 2.5 million of its Galaxy Note 7 smartphones will cost the company a "heartbreaking amount".

According to Bloomberg, the comment came on Friday when the head of Samsung's mobile business Koh Dong-Jin was asked by reporters about the financial impact of having to recall the phones, following the discovery of a defect in the batteries that caused some handsets to explode while charging.

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Some analysts forecast that the scale of the recall will cost Samsung anything between $1 billion and $5 billion in revenue. Given that Samsung's projected net income is $20.6 billion this year, the firm will undoubtedly absorb the loss. But Dong-Jin's comment could just as easily refer to the cost to the company's manufacturing reputation in its rush to beat Apple's iPhone 7 to market.

In Samsung's haste to beat Cupertino to launch, beginning last year the South Korean firm had brought forward the release of its Galaxy S and Galaxy Note series models by roughly a month. The move was initially deemed a success after it helped Samsung report on its best profit in more than two years, but the strains on its supply chain appear to have backfired disastrously.

"Samsung might have over-exerted itself trying to pre-empt Apple, since everybody knows the iPhones launch in September," said Chang Sea-Jin, business professor at Korea Advanced Institute of Science and Technology and author of Sony vs. Samsung, a history of the electronics giants.

Speaking to Reuters, Sea-Jin called the recall "an unfortunate event; it feels like Samsung rushed a bit, and it's possible that this led to suppliers also being hurried."

Samsung said in a statement to Reuters that it conducts "extensive preparation" for its products and will release them to the market "only after proper completion of the development process".

However, many view the recall as a gift for Apple, which is currently dealing with depressed phone sales and relatively lukewarm anticipation for this year's devices as analysts speculate the company is holding back its most impressive upgrades for 2017.

Indeed, since news emerged of Samsung's mass battery defect, Apple has alerted iPhone parts suppliers to increase production rates, suggesting the company is confident of a late surge in sales of its latest flagship smartphones.

"The time advantage that [Samsung] had on the iPhone, that's evaporated now," said Bryan Ma, an analyst at IDC in Singapore. "It'll hit them this quarter obviously, but if it's something they immediately address and immediately turn around, then there won't be a long-term impact."

With Apple said to be overhauling its mobile design for a tenth anniversary "iPhone 8", and Samsung clearly keen to bounce back and impress after its latest troubles, everything points to 2017 being potentially one of the most ultra-competitive years the smartphone industry has ever seen.

Article Link: Samsung Calls Note 7 Recall Cost to Company 'Heartbreaking'
 
2018?

I thought it was next year - 2017 - that a big (anniversary) iPhone release is rumoured?

Quote: However, many view the recall as a gift for Apple, which is currently dealing with depressed phone sales and relatively lukewarm anticipation for this year's devices as analysts speculate the company is holding back its most impressive upgrades for 2018.
 
I recall someone saying....

"Want to know what else it comes with?" He asked. "An audio jack. I'm just saying," he added with a smirk as the audience laughed.

And Tim should respond with
"Want to know what else?" "Our phones are currently in store and never been recalled, I'm just saying!"
 
It's very unfortunate for Samsung - but I give credit to them acting swiftly and responsibly. They didn't ignore the issue or insist there wasn't a problem. Karma might be a bitch, but Apple could learn something from this.

Exactly, they're not making any excuses or dragging it out so people start suing.

In Europe, Samsung will also give a free 128gb micro sd card to people who had one on order but got their ordered delayed because of this issue.
 
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Karma might be a bitch, but Apple could learn something from this.

Yeah, Apple certainly could learn something! Next time Apple rush production to undercut the new Samsung phone, without appropriate quality testing, leading to not identifying issues with phones exploding... :rolleyes:

Let me guess, you'll quote the 2011 dGPU failures or something, as pointing to Apple not doing a similar thing?

So many posters are out of touch with how the real world/businesses work. What Samsung have done in this situation is fully consistent with what all businesses would do. Samsung have not done anything out of the ordinary; well, other than releasing exploding phones.
 
Spend more time/money on quality, and less time/money trying to rush stuff out the door to "be first".

First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
 
Really sad considering how it's their best smartphone ever and how their design advancement totally kills the iPhone this year :(

Well, you're entitled to think that, personally I prefer a steady functional smartphone over one that expose. And design advancement is something personally, I still find the Note 7 not that beautiful and curved glass more an gadget then something truly functional. I rather see a screen from top to bottom without any buttons in the near feature over an edged screen.
 
Couldn't have happened to a better company.

Joking aside, I've been waiting for something like this to happen. You see all these hacks of people's personal data from various other companies and it's only a matter of time before someone like Google or Facebook get dragged into it. On the hardware side of things going wrong I always knew it would be Samsung. They're too preoccupied with trying to beat the iPhone in any way they can, even to the point of rushing their product out the door first. It was always going to end in disaster one day. Why can't these manufacturers just keep to themselves, concentrate on their own products instead of someone else's and release the product when it's ready to ship, preferably without half baked gimmicky features and terrible software.

Oh well, Samsung will have to pay the price. Will they learn from this mistake? Maybe, but probably not.
 
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