Samsung Electronics has certainly seen strength building with its mobile product line recently. Many Apple fans have chosen to drop the fruit and head over to the less expensive and in many cases, more advanced devices. But what’s just happened could strike a fiery blow to the tech company. Reports on Thursday have cited evidence that deliveries of the Samsung Galaxy Note 7 smartphones would be delayed because of exploding batteries. This has knocked off roughly $7Billion from the company’s market value.
The stock plummeted to two week lows after the global technology giant gave reports late Wednesday regarding that shipments would be delayed for “quality control testing”. Furthermore, shipments to South Korea’s top three mobile carriers has been halted. In the wake of the Apple iPhone’s pending iPhone 7 release in the coming days (based on speculation from other reports), this could become a major set-back for the South Korea based company. The Galaxy Note 7 would have been the newest premium flagship for Samsung…the timing of this couldn’t be worse…unless you’re Apple.
Several posts had been released of people showing images and videos of burnt Galaxy Note 7s online stating that their phones caught fire. “Be careful out there, everyone rocking the new Note 7, might catch fire y’all,” one user said in a YouTube clip showing a burnt Note phone.
The Galaxy S6 edge disappointed sales estimates last year and this latest mishap could risk a repeat if it can’t fix this issue quickly. But thanks to the launch of the S7 and S7 edge models in March, excitement began to build once again. The Note 7 has received similar acclaim in August saw a major rise in pent up demand, far exceeding supply. This pushed the firm to further delay the launch in certain markets. Some analysts are now saying that it could be inevitable that Samsung’s smartphone selling price & profit may miss based on second half expectations. The question is, what will they do to address the situation?