The president of
Samsung has confessed that recalling 2.5 million of its Galaxy
**te 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.
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 Cuperti** to launch, beginning last year the South Korean firm had brought forward the release of its Galaxy S and Galaxy
**te ****** 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 k**ws the iPhones launch in September," said Chang Sea-Jin, business professor at Korea Advanced Institute of Science and Tech**logy 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, after 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 flagship smartphones.
"The time advantage that [Samsung] had on the iPhone, that's evaporated **w," 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.
Related Roundup:
iPhone 8 (2017)
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