Aside from the literal holes its been capable of burning in its owners pockets, the now-canceled Galaxy Note7 may also end up burning a figurative $17 billion hole in its makers accounts. Some analysts estimate that the whole exploding phone debacle will translate into lost sales of up to 19 million units over what could have been the life cycle of the Note7.
That apparently amounts to around $17 billion of money that Samsung wont get. After the first recall of the Note7 started in early September, the estimate for lost sales (combined with the cost of the recall itself) only reached around $5 billion. But that was back when everyone still thought Samsung would continue selling the Note7 and that the replacement units handed out to people were safe and wouldnt catch fire too.
With its $235 billion market value and $69 billion in cash and equivalents (both numbers from the end of June), Samsung c an certainly afford to take this hit. Not a lot of companies in the mobile space can say that (the obvious exception being Apple of course). But in the long run, how much this entire fiasco has damaged the Korean companys brand in the perception of consumers everywhere remains to be seen. To mitigate some of the bad publicity its accrued over the past few weeks, Samsung could even kill the Note line entirely, and just call the Note7s successor something else next year. In the meantime, its upping Galaxy S7 production hoping that would-be Note7 owners will turn to its last non-exploding flagship instead.
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