According to the US financial media CNBC, South Korea's Samsung Electronics announced on Tuesday that it has completely terminated the production and sales of the Galaxy Note 7 smartphone. This incident has temporarily brought an end to the loss of quality of the South Korean technology giant.
Earlier on Tuesday, Samsung Electronics asked its global partners to stop selling and replacing the Galaxy Note 7. Affected by this news, Samsung Electronics shares fell more than 8% on Tuesday. After the South Korean stock market closed, Samsung Electronics announced that it would stop producing the Galaxy Note 7.
According to data from Thomson Reuters, Samsung Electronics' shares closed at 1.545 million won on Tuesday, with a market value of about $ 18 billion.
Samsung Electronics said on Tuesday that it has asked all carriers and retail partners worldwide to stop selling and replacing the Galaxy Note 7, and the company's investigation into battery issues with this product is ongoing.
Prior to this, Samsung Electronics also replaced the new Galaxy Note 7 for consumers worldwide, but there are reports that the new product after replacement is still at risk of fire, including a Galaxy Note on the Southwest Airlines flight. 7 fire incident.
Subsequently, South Korean media "Hankyoreh" reported that Samsung Electronics was inclined to completely stop production and sales of the Galaxy Note 7.
"Korean National Daily" quoted sources as saying: "Even if the CPSC determines that it is not a fire caused by a product defect, it is not easy to re-produce and sell the Galaxy Note 7."
In response to this report, Samsung Electronics told CNBC that it "will take more specific measures after communicating with operators and government agencies in each country."
Or lose $ 9.5 billion
Prior to the recall, analysts expect Galaxy Note 7 shipments to reach 15 million to 19 million units in the third and fourth quarters of 2016 and the first quarter of 2017. Nomura said the loss could be as high as 10.7 trillion won (approximately $ 9.5 billion) based on estimates of 16 million Galaxy Note 7 shipments.
"We believe the Galaxy Note 7 incident may have a negative impact on demand for Samsung Electronics' other smartphone models," Nomura Securities said in a research report on Tuesday.
Nomura Securities believes that Samsung Electronics ’operating profit for the fourth quarter fell 85% from its current expectations of 500 billion won, and that the company ’s mobile division ’s 2017 profit fell 22% from current expectations.
Apple shares rise
Analysts said that "falling" Samsung Electronics may make Apple profit, and Apple shares rose 1.74% on Monday.
Neil Shah, research director of market research firm Counterpoint, said: "Samsung consumers may choose Apple products, they are some high-end users, often choose high-end brands." Shaha predicts that Samsung Electronics Smart Mobile phone shipments will decline in 2017.
The large-scale recall also put pressure on other Samsung Electronics devices, such as flagship models such as the Galaxy S7 and S7 Edge. Analysts said the damaged reputation of Samsung Electronics could affect the upcoming next-generation flagship Galaxy S8, which will debut in the first quarter of 2017.
Credit Suisse pointed out in a research report on Tuesday: "How this incident will comprehensively affect the future sales of Samsung Electronics smartphones in terms of brand value, image and loyalty, and more importantly, it will be released in 2017. The true flagship model, the Galaxy S8, launched in January. The first recall can be easily ignored, but it is much more difficult to ignore the second. "
Nomura Securities still maintains its Buy rating on Samsung Electronics stock, suggesting that the negative impact of the Galaxy Note 7 will be offset by the strong performance of the semiconductor and display divisions.
Nomura Securities said that even if Samsung ’s mobile division ’s operating profit fell 85% in the fourth quarter of 2016 and fell 22% in 2017, which is the worst case, the company ’s overall operating profit in 2017 may Increased by 30% to 37.6 trillion won, exceeding the historical peak of 36.8 trillion won set in 2013.