Sprint CEO Says Samsung Galaxy Note 7 Recall Will Be Forgotten In 6 Months
It's safe to say that the Note 7 is Samsung's flagship phablet, and the lineup has largely been trustworthy over the years, attracting loyal customers.
The recent recall of the Note 7, the latest in the phablet lineup, has however been giving Samsung a number of problems with customers reluctant to hand over potentially faulty devices. Now as the replacement devices have been arriving in the hands of customers, carriers have started to comment on how the Korean major will be impacted by the fallout from the recall.
Among the carriers who have been providing insight about the recall is Sprint. Speaking to Fortune, the Sprint CEO Marcelo Claure says that "six months from now nobody will remember that there was a Note 7 recall." While this is an optimistic assessment of the recall and its long term impact on Samsung, Claure seems to be basing it on the assumption that the attention span of consumers is very short, and that they want to keep enjoying the benefits provided by the Note 7.
Claure also adds that issues with phones keep happening but they are amplified on the internet. However, even as the CEO of Sprint was attempting to put a positive spin on the recall, warning bells have been sounding on the market. Fortune says that some analysts view the Note 7 recall as a huge problem that will drag down Samsung's profit this year, and they have pointed out that lost revenue could total about $5 billion.
Sprint is already moving ahead with shipping the replacement devices to its customers and it is likely that the issue with exploding batteries that forced the recall will not occur again. However, with the recall moving at a snail's pace, analysts estimate that 2.5 million phablets need to be recalled worldwide, so negative sentiment about it could linger for some time.
It is likely that the full cost of the Note 7 recall, its impact on Samsung's revenue and how the phablet performs against its competitors will only emerge by the time the recall is complete. Meanwhile, Samsung's major competitor Apple has been doing much better with its recently released iPhone 7 lineup selling well and causing its shares to surge in the stock market. Analysts also iPhone 7 sales could reach 100 million units by the year end due to the Note 7 fiasco.
Finally, there are very little indications of how the recall will impact the Note 7 brand and its value. The previous edition in the lineup, the Note 5, ranks before the iPhone 6s Plus and Samsung will be hoping that the goodwill is transferred to the Note 7. It is also likely that if this goodwill translates to increased sales of the Note 7 in the upcoming months, Samsung will be able to curtail the loss arising from the recall.
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