Reports of Galaxy Note 7 bursting into flames has been Samsung’s worst crisis yet. It all started off when users of the once coveted phone raised complaints that the devices were catching fire. At the time, Samsung moved in quickly to tame this emerging crisis by giving out replacements. Unknown to them was the fact the move was to give birth to another hot crisis. Similar complaints emerged again from those who had received the replacements.
Samsung’s Suppliers to be compensated
Earlier this week, Samsung Electronics made it clear it would compensate suppliers struck by their decision to halt the production of Galaxy Note 7. The company remarked that the whole affair would cost them billions of lost profits amounting to almost $5.3 billion over the three quarters starting July.
A week ago, the electronics giant had made an announcement that it would discontinue the Note 7 not only due to safety fears but also the failed attempt to cool off the crisis through issuing out replacements. (See Samsung Galaxy Note 7 terminated)
Parts manufacturing companies that supply the company with camera modules, casings and a ton of other components have also not been left out -with their loses hitting almost $1.7 billion.
In statement, the firm mentioned “We will offer full compensation for remaining inventories of Note 7 components among our suppliers,” They even went ahead to apologize for causing concern among the suppliers as a result of the discontinuation of the Galaxy Note 7.
South Korean Economy Affected
The South Korean economy has not been spared either. An official of the country’s government remarked that the crisis will take a toll on the country’s economy during the last two quarters of the year. Samsung currently accounts for a fair share of the country’s GDP at 17 percent. According to Japan today, the growth outlook had taken a deep from 2.9 percent to 2.8 percent, something the Central Bank of Korea has noted with concern.
Note 7 Flight ban
Earlier on, a number of aviation institutions the world over had issued out stern warnings to air passengers with Galaxy Note 7 phones. In the U.S, you are likely to face fines and have your phone confiscated if found with it on flight.
“We recognize that banning these phones from airlines will inconvenience some passengers, but the safety of all those aboard an aircraft must take priority” Anthony Foxx, the US transport secretary, said in a statement earlier this week.
As more issues continue to be raised about the Note 7, Samsung’s comeback will now largely rely on their transparency in confronting the battery issue and issuing out a product that won’t ever burst in flames or carry related complications.