Saturday , June 23 2018

The Note 7 fiasco will cost Samsung around $4 billion in profit write-down

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Everyone thought that the cost of Samsung’s terminating the Galaxy Note 7 line would be expensive, but the company has revealed the true cost … and it’s big. According to the company’s own release, the drama with the troubled smartphone will cost the company around the $AUD 4 billion mark across the last three months of 2016, and the first quarter of 2017.

To mitigate the loss, Samsung is bolstering sales of its still-successful Galaxy S7 line, which will undoubtedly see a kick anyway as Samsung fans look for something else to replace their Note 7. In Australia, at least, Samsung is offering significant incentives to users who stay with the Samsung brand, with credits on offer to those who re-contract or take up a Galaxy S7 or S7 Edge when handing in their Note 7s.

At the end of the day, the cost may not be enough to ruin Samsung — which announced yesterday that its earnings for Q4 2016 would still be around the $AUD 55 billion mark — but it certainly hurts. From this, the company is doubling down its efforts on product quality control and safety, to hopefully avoid a repeat of this most unfortunate episode in its mobile phone history.

Chris Rowland   Editor and Publisher

Chris has been at the forefront of smartphone reporting in Australia since smartphones were a thing, and has used mobile phones since they came with giant lead-acid batteries that were "transportable" and were carried in a shoulder bag. He saw the transition from AMPS to GSM, loved the Motorola StarTac, and got into Palm technologies in a big way. The arrival some years later of the original iPhone, and then the early Androids, awoke a new interest in mobile technology, and Chris has been writing about it since.

Today, Chris publishes one of Australia's most popular technology websites, Ausdroid. His interests include mobile (of course), as well as connected technology and how it can make all our lives easier.

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