Scrapping The Galaxy Note 7 Will Cost Samsung £4.4 BILLION

The fiasco will wipe out its entire mobile business profit for this quarter.

14/10/2016 10:48

Samsung has revealed that the true cost of scrapping the Galaxy Note 7 could be as much as £4.4 billion.

The South Korean firm confirmed that discontinuing the faulty smartphone would effectively cost the company £2.5 billion during this and the next quarter.

Steve Sands via Getty Images

Samsung had already cut its third-quarter profit forecast by £1.9 billion earlier this week, an amount that could wipe out its entire mobile business profit.

On Tuesday, Samsung scrapped its flagship Galaxy Note 7 smartphone, a day after halting sales because of concerns over consumer safety, with faulty units overheating and exploding due to a battery defect.

But Samsung has enough cash to absorb the shock from the phone recall. The company said it expects to generate 5.2 trillion won (£3.7 billion) in operating profit during the third quarter after the recall cost.

Samsung added that it will make significant changes in its quality assurance processes to enhance product safety for consumers.

Ilya S. Savenok via Getty Images

The company said it will expand sales of two other smartphones released in spring - the Galaxy S7 and Galaxy S7 Edge - quashing rumours that it may try to release updated versions of those devices.

If you own a Galaxy Note 7 and have not yet been able to return it here’s some helpful on advice on what to do next:

1. Back up your data then turn it off

This seemingly goes without saying, but it’s always good to be sure. The Note 7 is a defective piece of technology that has the potential to catch fire. Backing up your data then turning it off is a must.

If you’re stuck on how to back up, there’s a great explainer by the Android experts Android Central which you can read here.

2. Call this number and arrange a recall

Samsung should be reaching out to you individually, if they haven’t though there’s a special phone number you can call Monday-Saturday 9am to 6pm, Sunday 10am-6pm.

Call: 0330 7261000

Samsung then should be able to send you the fairly extreme packaging needed to send the Note 7 back to them.

3. Exchange your Note 7 or get a full refund

Samsung UK are offering Note 7 users two options when it comes to reimbursement. They will either offer you a Galaxy S7 or S7 edge with a refund of the price difference or you can obtain a full refund for the phone.

Considering you can currently only buy the S7 or S7 edge from Samsung with 32GB of storage you might want to consider either using the extra money on a microSD card OR find an alternative using our guide to the best smartphones available right now:

  • Apple iPhone 7
    Eduardo Munoz / Reuters
    This is Apple’s best iPhone ever, and if we’re honest it’s one of their most innovative devices yet. It has an incredible camera, is water-resistant and boasts a stunning bright new display. Of course it can’t escape the rumours surrounding next year’s device but if you’re looking to buy a smartphone right now, and Apple are on your radar, this is the phone for you.
  • OnePlus 3
    The Huffington Post UK
    The OnePlus 3 continues the tradition set by the original OnePlus as being a 'flagship killer'. It might only cost £329 but it's a stunning smartphone with a unibody aluminium design and every feature you could possibly want. It's powerful, features a fingerprint sensor and contains OnePlus' rather impressive Dash Charging feature which superchargers your phone safely and without turning it into a burning hot lump of metal.
  • Samsung Galaxy S7 edge
    Bloomberg via Getty Images
    With a new curved back and larger 5.5-inch display the Samsung Galaxy S7 edge is more about evolution than revolution. The S7 edge now sports a water-resistant body, embedded camera and a MicroSD card slot. The S7 edge is also Samsung's most powerful smartphone yet, so powerful in fact that Samsung have actually had to equip a tiny water-cooling system inside the phone. The good news though is that means you'll never have to worry about getting a warm hand.
  • HTC 10
    The Huffington Post UK
    The new HTC 10 might not have the waterproof credentials of the Galaxy S7 but what it lacks in weather resistance it more than makes up for in media specs. This is a Hi-Res audio playing pro thanks to dual-amplifiers built-in and Hi-Res audio headphones provided as standard. It also has one of the best screens we've ever seen on a smartphone, so there's that.
  • Apple iPhone SE
    The Huffington Post UK
    Incredibly, Apple's familiar-looking iPhone SE manages to boast the same performance as its top-of-the-range iPhone 6s making it the most powerful 4-inch smartphone available. If you're keen to return to the days of one-handed texting then Apple's bite-sized iPhone is the smartphone for you.
  • LG G5
    The LG G5 sets itself apart from rivals like the S7, Xperia XA and the iPhone 6s by being something utterly unique. The G5 is the first commercial 'modular' phone, allowing you to swap out the bottom for new accessories. So far there's an audio one made in partnership with Bang & Olufsen and a camera-focused attachment which gives you extra camera controls.
  • Huawei P9
    JACK TAYLOR via Getty Images
    The Huawei P9 is a smartphone designed for capturing life. Thanks to a partnership with photography legends Leica this dual-lens camera can take pictures that'll put your dedicated camera to shame. Of course it helps that the P9 is also a pretty great Android smartphone as well.
  • Google Nexus 5X
    The Nexus 5X strikes the ultimate balance between power and affordability. Taking over the responsibility from the frankly excellent Nexus 5, Google's new smartphone boast an ultra-light body but still crams in a fingerprint sensor, the latest version of Android marshmallow and a Full-HD display.
  • Sony Xperia Z5 Premium
    Sony has created the world's first truly 4K smartphone. While you might be wondering why, the fact is they've gone ahead and done it anyway. Utilising Sony's amazing screen expertise it should come as no surprise to learn the display is an absolute stunner. There's a fingerprint reader and the ability to play high-res audio.
  • Google Nexus 6P
    The Google Nexus 6P is Google's answer to the big-screen phone. Sporting a 5.7-inch Full-HD panel, the 6P has a beautifully thin unibody enclosure while the subtle fingerprint scanner on the back can be used for security and for paying. You'll also get the added advantage of owning a phone that'll always get Google's Android software before anyone else keeping it safer than ever.
  • Motorola Moto X Force
    The Moto X Force might not be the most stylish phone of the bunch but what it lacks in looks it more than makes up for in strength. With an 'unbreakable' screen the Force is a no compromises Android phone that has a 5.4-inch AMOLED display. 
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