As most of us know by now, Samsung’s Galaxy Note 7 smartphone has been nothing short of a total failure with Samsung permanently pulling the device off shelves within 2 months after launch. Although Samsung’s brand is on the device, the Note 7 itself isn’t completely produced in house with many of the components coming from outside suppliers. As these suppliers expected the Note 7 to do as much as $17 Billion in sales through its lifecycle, many suppliers have invested heavily into development and production of components designed to be used in the Note 7, which is a problem now as the product has been discontinued.
However according to a new report from Electronic Times, Samsung will be compensating its suppliers in full for components that have been manufactured, unfinished components, and raw materials used to make these components. Furthermore, Samsung is also looking into providing their suppliers additional component orders for other Samsung products to help mitigate the financial impact. Samsung is estimated to be compensating as many as 70 businesses with approximately 300 Billion KRW ($267 Million USD).
While Samsung component suppliers are being taken care of, this debacle is still going to be painful for many in the smartphone accessories industry. With all Note 7 devices now being recalled, many Note 7 cases, screen protectors, and other accessories are likely to be trashed with all development costs wasted in the process as well.
How come EVERY phone with non-replaceable battery today can have its battery replaced by the Original Manufacturer, when the battery reaches the end of life. At this time, I believe ALL manufacturers will replace the battery at a nominal cost of $20-$30.
Why then if the problem with Note 7 is in the battery being too thick or too big or too low margin – Samsung could not just replace the battery and let us all have a very perfect otherwise device?
I would even pay the cost….
Anyone knows the answer to this question?
I think it’s because when Samsung initially recalled the phones, they didn’t know if it was the battery or some other component that was causing the overheating which is what led to the several month long investigation. During the investigation, obviously it wasn’t a good idea to sell the phone. Now that it’s been confirmed that it’s the battery, Samsung could potentially replace the battery and resell the device, but they’ve already halted production of the phone. There has been talk of selling refurbished Note 7 devices, but I think that will have to go through regulatory agency approval and carriers would have to be willing to carry it again as well. Whether it’s too much work for too little reward is something Samsung is likely thinking about as they figure out what to do with all the phones.