Note 7 Recall Will Cost Samsung Around £2.5bn

samsung galaxy note 7 fireSamsung Electronics has estimated the negative impact of its Galaxy Note 7 recall and discontinuation at somewhere in the mid-three trillion Won range (around £2.5bn).

That breaks down into around 2.5 trillion Won in Q4 2016, and one trillion Won in Q1 2017.

The Note 7 was initially recalled last month due to numerous reports of the handsets catching fire. At that point the cost was estimated to be around the $1bn mark by analysts, but after similar problems with the replacement devices, production of the devices was this week halted completely.

That move – along with the initiative, announced yesterday, which will see the company offer up to $100 in bill credit for US customers exchanging their Note 7 for another Samsung device, and $25 for non-Samsung devices – has driven that cost up significantly.

Its a huge hit for Samsung, and these figures dont take into the potential for lost future sales due to the damage to Samsungs brand reputation. According to a survey conducted on 11-12 October by Branding Brand, 40 per cent of current Samsung smartphone owners said that they would not buy another device from the company in future – up from 34 per cent in a matching survey carried out a month earlier, after the initial recall.