Samsung’s disastrously defective new Galaxy Note 7 has wiped about $25 billion off its market value, with its stock falling almost 11% in trading on Friday and Monday. It’s the worst fall for the Korean electronics giant since 2008, according to Bloomberg data. The blown launch of the Note 7, Samsung’s iPhone competitor, will cost an estimated $1 billion in recall costs alone.
But the true costs to the company could be much higher if its flagship brand struggles to recover from brutal headlines in the US — including a New York Post report Sunday that a old was taken to hospital with burns after a Note 7 exploded in his hands. One industry analyst, John Donovan at BlueFin, even raised his estimate of how many iPhone 7s Apple would sell given the collapse of an important competitor. He said the “ reporting environment” around the Note 7 and its defects has left Apple “primed to swoop in and take full advantage.
” Several airlines have told customers to not fly with their Note 7s charged or even on during the flight, while Delta said the devices could only be taken as luggage, and must be switched off during the flight. Samsung stock fell 7% on Monday, meaning the company’s market value has fallen by more than the entire valuation of HP. While the problems with the phone’s battery occasionally overheating and combusting have been known since early September when the company announced a voluntary exchange program, the bad news climaxed late last week when Samsung instructed customers to “power down their Galaxy Note7s and exchange them now.
” Airline just gave a verbal warning to passengers who own galaxy note 7: ”due to recall, must be powered off and stowed. No charging.” wow Delta isn’t allowing Galaxy Note 7 phones in checked baggage or to be turned on at any time during flight, The Consumer Product Safety Commission said on Friday that consumers should turn off their Note 7s and not charge them.