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.

applevsamsung
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.

Top Rated Comments

keysofanxiety Avatar
115 months ago
Meanwhile, in Cupertino:

Score: 57 Votes (Like | Disagree)
keysofanxiety Avatar
115 months ago
They could just release the Note 5 all over again, it trumps the iPhone either way.
Not in a million years. Even the current iPhone 6S makes mincemeat of most other phones/phablets in regards to performance.
Score: 22 Votes (Like | Disagree)
JohnApples Avatar
115 months ago
"Give Samsung credit." Oh man. Of course they acknowledged and recalled them, there's a physically dangerous risk. It would be criminal not to. Nobody "gives credit" to car manufacturers or companies that make baby products when they recall their stuff. It's something they NEED to do.

I'd give Samsung credit if they avoided this altogether and made sure their batteries didn't explode in the first place. And no, I'm not saying Apple handles their product issues perfectly. Far from it. But Samsung does not deserve to be praised for having a recall. Good lord.
Score: 18 Votes (Like | Disagree)
keysofanxiety Avatar
115 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
Yeah, like that whole exploding battery feature. Can your iPhone do that?
Score: 17 Votes (Like | Disagree)
keysofanxiety Avatar
115 months ago
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.
Score: 16 Votes (Like | Disagree)
NT1440 Avatar
115 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
And iPhones have features no non-iOS device will ever have, what's your point?

Let's whip out our spec sheets and compare shall we? :rolleyes:

Honestly, sometimes I see the tech fans as having the same "my truck has bigger tailpipes" mentality that I find so sad in people. Get the device that has the features you want/need.
Score: 14 Votes (Like | Disagree)

Popular Stories

maxresdefault

Five Features Coming to AirPods Pro 3

Friday June 27, 2025 10:52 am PDT by
Apple hasn't updated the AirPods Pro since 2022, and the earbuds are due for a refresh. We're counting on a new model this year, and we've seen several hints of new AirPods tucked away in Apple's code. Rumors suggest that Apple has some exciting new features planned that will make it worthwhile to upgrade to the latest model. Subscribe to the MacRumors YouTube channel for more videos. Heal...
iPhone Car Key WWDC 2025

Apple Announces 13 Automakers Planning to Offer iPhone Car Keys

Friday June 27, 2025 11:42 am PDT by
In 2020, Apple added a digital car key feature to its Wallet app, allowing users to lock, unlock, and start a compatible vehicle with an iPhone or Apple Watch. The feature is currently offered by select automakers, including Audi, BMW, Hyundai, Kia, Genesis, Mercedes-Benz, Volvo, and a handful of others, and it is set to expand further. During its WWDC 2025 keynote, Apple said that 13...
anker power bank recall

PSA: Anker Recalls Multiple Power Banks Due to Fire Risk

Friday June 27, 2025 4:16 pm PDT by
Popular accessory maker Anker this month launched two separate recalls for its power banks, some of which may be a fire risk. The first recall affects Anker PowerCore 10000 Power Banks sold between June 1, 2016 and December 31, 2022 in the United States. Anker says that these power banks have a "potential issue" with the battery inside, which can lead to overheating, melting of plastic...
Chase Sapphire Reserve Apple Perk Feature

Chase Sapphire Reserve Card Introduces New Perk for Apple Customers

Wednesday June 25, 2025 2:08 pm PDT by
Chase this week announced a series of new perks for its premium Sapphire Reserve credit card, and one of them is for a pair of Apple services. Specifically, the credit card now offers complimentary annual subscriptions to Apple TV+ and Apple Music, a value of up to $250 per year. If you are already paying for Apple TV+ and/or Apple Music directly through Apple, those subscriptions will...
iPhone 17 Pro Blue Feature Tighter Crop

iPhone 17 Pro Launching in a Few Months With These 12 New Features

Thursday June 26, 2025 2:00 am PDT by
Apple's next-generation iPhone 17 Pro and iPhone 17 Pro Max are around three months away, and there are plenty of rumors about the devices. Apple is expected to launch the iPhone 17, iPhone 17 Air, iPhone 17 Pro, and iPhone 17 Pro Max in September this year. Below, we recap key changes rumored for the iPhone 17 Pro models:Aluminum frame: iPhone 17 Pro models are rumored to have an...
A18 Pro Chip

New MacBook With A18 Pro Chip Spotted in Apple Code

Monday June 30, 2025 8:05 am PDT by
Apple is developing a MacBook with the A18 Pro chip, according to findings in backend code uncovered by MacRumors. Earlier today, Apple analyst Ming-Chi Kuo reported that Apple is planning to launch a low-cost MacBook powered by an iPhone chip. The machine is expected to feature a 13-inch display, the A18 Pro chip, and color options that include silver, blue, pink, and yellow. MacRumors...
macbook air spacegray purple

Apple Planning to Launch Low-Cost MacBook Powered By iPhone Chip

Monday June 30, 2025 3:20 am PDT by
Apple is planning to launch a low-cost MacBook powered by an iPhone chip, according to Apple analyst Ming-Chi Kuo. In an article published on X, Kuo explained that the device will feature a 13-inch display and the A18 Pro chip, making it the first Mac powered by an iPhone chip. The A18 Pro chip debuted in the iPhone 16 Pro last year. To date, all Apple silicon Macs have contained M-series...
CarPlay Ultra Climate Controls

Here's Which Vehicle Brands Will and Won't Offer Apple's CarPlay Ultra

Friday June 27, 2025 9:52 am PDT by
Apple last month announced the launch of CarPlay Ultra, the long-awaited next-generation version of its CarPlay software system for vehicles. There was news this week about which automakers will and won't offer CarPlay Ultra, and we have provided an updated list below. CarPlay Ultra is currently limited to newer Aston Martin vehicles in the U.S. and Canada. Fortunately, if you cannot...
apple watch ultra 2 new black

Apple Watch Ultra 3 Finally Coming After Two-Year Hiatus

Tuesday June 24, 2025 3:40 am PDT by
Apple will finally deliver the Apple Watch Ultra 3 sometime this year, according to analyst Jeff Pu of GF Securities Hong Kong (via @jukanlosreve). The analyst expects both the Apple Watch Series 11 and Apple Watch Ultra 3 to arrive this year (likely alongside the new iPhone 17 lineup, if previous launches are anything to go by), according to his latest product roadmap shared with...