Samsung increases its guidance on how much the scrapping of its fire-prone Galaxy Note 7 will cost - now saying the total bill the smartphone maker will suffer could come to over $5 billion. Kate King reports.
The Galaxy Note 7 was supposed to be the 'smart phone that thinks big'. It's catastrophic failure now forcing Samsung to think big picture. The tech giant upping its guidance on how much switching off sales of its flagship smartphone will cost. It says the total bill could now come to over $5 billion dollars. SOUNDBITE, BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM SAYING: "I think tough times ahead but the market has certainly taken the view at the moment that the damage is in the price, Samsung has quantified it, but I think we may be in a very very different place 6-9 months up the road when we are in a new product cycle and perhaps consumers are a little more reticent before picking up another Samsung handset." Samsung shares, which have fallen as much as 10 percent edged up after the announcement. But it's not so easy regaining favour with consumers. SOUNDBITE) (English) A SAMSUNG USER, PARAS BISHIT, SAYING: "I am a Samsung user myself and I fear for my life. I am getting the reports from all around the world, from across the country that Samsung phones are getting these kinds of complaints so I think Samsung maker should seriously think about this problem and rectify this." Samsung says it will expand sales of gadgets like the Galaxy S7 and S7 Edge phones to try and make up for lost revenue. But until it identifies and communicates WHAT went wrong, Reputational damage may end up being more harmful than any quantifiable costs.