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 two-day fall for the Korean electronics giant since 2008, according to Bloomberg data.
The blown launch of the Note 7, Samsung’s would-be 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.
It was all good just a week ago. (I love that line from Jay-Z.) This recall will be extremely hard to bounce back from. I was helping a customer the other day that asked me about a prepaid phone, which was a Samsung phone, but had nothing to do with the Note 7. The customer asked me if this was the one that’s exploding. That made me realize that even after the battery is fixed, the term Samsung Smartphone just became very unattractive. The average customer doesn’t know these names or that they’ll be fixed in a few weeks. They just know that if you have a Samsung phone, it could possibly blow up on you.
Also worth noting: my good friend, who’s been buying Notes since as far back as I can remember. Maybe since the first one. He has to return his Note because of this recall, and when he walks in to return the phone, he’ll be walking out with an iPhone 7 Plus.