A model poses for photographs with a Galaxy Note 7 new smartphone during its launching ceremony in Seoul, South Korea, August 11, 2016. REUTERS/Kim Hong-Ji/File Photo
Samsung Electronics’ worst-ever recall could cost the company as much as $17 billion after it halted sales of its flagship Galaxy Note 7 for a second time, spelling an almost certain end for the ill-fated premium model.
Samsung announced the recall of 2.5 million Note 7s in early September following numerous reports of the phones catching fire and on Tuesday the crisis deepened: The company told mobile carriers to stop sales or exchange of the $882 device and asked users to shut off their phones while it investigated new reports of fires in replacement Note 7s.
As the world’s top-selling smartphone company awaits results of probe by U.S. safety regulators, some investors and analysts predict Samsung may scrap the Note 7 and move on to successor models to limit the financial and reputational damage.
“In the worst case scenario, the U.S. could conclude the product is fundamentally flawed and ban sales of the device,” said Song Myung-sub, an analyst at HI Investment Securities.
If Samsung stops selling the Note 7s, that will translate into lost sales of up to 19 million phones, or nearly $17 billion, that the firm was expected to generate during the Note 7’s product cycle, according to analysts including those at Credit Suisse.
That’s a big increase from $5 billion in missed sales and recall costs analysts initially expected Samsung to incur under the assumption that the firm would resume global Note 7 sales in the fourth quarter.
Chances of that now look slim. South Korea’s Hankyoreh newspaper, citing unnamed sources, said on Tuesday Samsung will likely stop Note 7 sales permanently. Samsung did not comment on the report.
“This has probably killed the Note 7 brand name,” said Edward Snyder, the managing director of Charter Equity Research.
“By the time they fix the problem they have to go through recertification and requalification and by the time that happens, they’re going up against the (Galaxy) S8 launch.”
Samsung has already temporarily halted Note 7 production, a source familiar with the matter said on Monday. That could lead to a write-down in inventory in the event Samsung has to end sales entirely.
Broker Nomura estimates Samsung may have to incur up to 1.6 trillion won of disposal costs in the fourth quarter, assuming around 4 million Note 7s have been made.
For Samsung, with a market value of $235 billion and $69 billion in cash and equivalents at the end of June, the loss of sales of one model could be absorbed.
The bigger problem will be long-term impact on its reputation and brand, analysts and experts say.
“We think the Note 7 incident may hurt demand for Samsung’s other smartphone models as well,” Nomura analysts said in a note, adding it may have to slash Samsung’s fourth-quarter mobile division profit estimates by as much as 85 percent.
Verizon Communications Inc., the largest U.S. wireless carrier, is already considering shifting marketing away from the troubled Note 7s, a company spokesman said on Monday.
That will likely boost rival products such as the new Google Pixel and Apple Inc’s new iPhone taking market share from Samsung, as most vendors launch new products ahead of the critical year-end holiday sales season.
“The (Note 7) unit is forever going to be tarnished and the danger is that the brand becomes irretrievably damaged as well,” said Stephen Robb, a partner at UK law firm Weightmans.
“They need to be writing to every customer with an apology and some form of ‘compensation’… It will clearly be costly for the company but the alternative is to end up going the way of Nokia and Blackberry.”
Samsung also faces lawsuits, with at least two consumers taking the company to the court in the United States to claim compensation on damages stemming from the faulty smartphone.
The firm received 92 reports of batteries overheating in the United States, including 26 reports of burns and 55 reports of property damage, according to the U.S. regulator’s announcement of the Sept. 15 recall.
The Note 7 woes may also roil Samsung’s component business, an important and growing source of revenue, as it provides key smartphone parts such as phone screens and memory chips.
Falling Note 7-related orders could not only cut overall revenue for the component business unit, but also crimp prices of such parts, analysts said. — Reuters
Xi calls for efforts building China into world science, technology leader
Chinese President Xi Jinping attends the first meeting of the French-Chinese business council in Beijing, China, January 9, 2018. REUTERS/Ludovic Marin/Pool
Chinese President Xi Jinping on Monday called for efforts to build China into a world leader in science and technology.
Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, said as China strives for prosperity and rejuvenation, it needs to devote great energy to promoting science and technology, endeavoring to be a major world center for science and innovation.
Xi made the statement at the opening of the 19th Meeting of the Academicians of the Chinese Academy of Sciences and the 14th Meeting of the Academicians of the Chinese Academy of Engineering.
Xi first extended his congratulations to the convention of the meetings.
“Firstly, on behalf of the CPC Central Committee, I would like to extend my warm congratulations to the meetings’ convention, and also my sincere greetings to you and the country’s whole science and technology personnel represented by you,” said Xi.
Xi said the circumstances, challenges and missions are pressing, calling on the country’s science and technology personnel to grasp the main trends, seize opportunities, face problems squarely, and rise to challenges.
Quoting ancient poem lines and Chinese idioms, Xi praised the hard work and achievements made by the academicians.
“‘For my country, I shed my blood that dyed red the autumn leaves on thousands of peaks.’ The academicians of the two academies are the nation’s wealth, the people’s pride, and the nation’s glory. With outstanding academic attainments and broad visions in the field of science, generations of deeply patriotic scientists have been making historic and major contributions to their motherland and people. The numerous milestones in our motherland’s pursuit of science and innovation are filled with efforts and sweat of the academicians. Many of our academicians have lofty ideals to ‘show concern for the world first and enjoy themselves last’. They are the nation’s heroes who ‘accomplish world-changing work, but not known to many’,” said Xi.
Xi said they should aim for the frontiers of science and technology, lead the direction of scientific and technological development, shoulder the heavy responsibilities bestowed by history, and be vanguards in innovation in the new era.
“The direction for socialism with Chinese characteristics for a New Era has been clear-cut. The vessel carrying the Chinese nation to its great rejuvenation is braving the wind and waves. Let’s unite more closely to overcome the difficulties with firm confidence, making brave strides towards the great goal of building China into a world science and technology power,” said Xi.
Members of the Standing Committee of the Political Bureau of the CPC Central Committee attending the meeting were Premier Li Keqiang, Wang Huning, who is a member of the Secretariat of the CPC Central Committee, and Vice Premier Han Zheng. — Reuters
Watchdogs! The strays trying to keep Thai streets safe
Meet the four-legged furry friends chosen to test run a prototype ‘smart vest’ which could turn stray dogs into heroes by spotting potentially unfriendly strangers and other dangers within a community.
“Our philosophy at work is to show how creativity and technology can be used together to help solve problems for the people or society,” said Satit Jantawiwat, chief creative officer at Chiel.
A hidden camera is attached to the collar of a dog’s vest and activated when its sensors detect aggressive barking noises, sending a live streaming video of what the dog saw in front of them to a central location.
The Phuket-base Soi Dog Foundation, a group formed over a decade ago to save street dogs and cats in Thailand, welcomed the initiative but deemed the vests to be in an early ‘trial and error’ stage.
“It’s too early a stage to actually say how practical the vests are. We really don’t know how they’re going to work. So, it’s going to be trial and error. We’re also going to be on a steep learning curve at the start and then we will iron out differences as we move forward,” said Soi Dog Foundation managing director Martin Turner.
The project began in March 2017 and the Cheil company said there will be more development before the project is introduced for a full trial run in the community. — Kath Dumaraos | UNTV News & Rescue
Samsung unveils Galaxy S8 smartphone
South Korean tech giant Samsung Electronics lost to its rival Apple in the smartphone scene after the embarrassing withdrawal of the fire-prone Note 7S.
Now, it is back with a bang.
Boasting some of the largest wrap-around screens ever made, Samsung’s long-awaited Galaxy S8 is finally unveiled.
“This is a big one, and Ithink that Samsung had a lot to prove — and I think they did. I mean I haven’t used the phone for extended period of time but what I’ve seen so far is very positive,” said Patrick Moorhead, president and principal analyst of Moor Insights & Strategy.
Two versions of the Galaxy S8, code-named ‘Dream’, internally, were launched at a media event here in New York on Wednesday: 6.2-inch and 5.8-inch curved screens – the largest to date for Samsung’s premium smartphones.
“We spent a little bit of time about the new battery suit safety program they had, which I think was a good thing, but I think to consumers, if it’s a great phone, that’s going to just fade into the background,” Moorhead said.
The phones, which will go on sale on April 21, are slightly longer but comparable in width to their predecessors as Samsung has eliminated nearly all of the bezel borders around the face to maximize the screen surface area.
The S8 features Samsung’s new artificial intelligence service, Bixby, with functions including a voice-commanded assistant system similar to Apple’s Siri. — UNTV News and Rescue