In what appears to be an unprecedented move in the industry, Samsung has halted production of its troubled Galaxy Note 7. The device was previously recalled while the South Korean manufacturer sought to remedy problems with its lithium-ion batteries that were causing fires.
The fix didn’t work, and phones with new batteries continued to catch fire. On airplanes across the US and Europe, Galaxy Note owners have been told not to plug in or turn on their devices. Now, Samsung could be facing a loss of roughly $17 billion, according to financial analysts, based on prior sales estimates.
Beyond the potential billions in lost Galaxy Note 7 sales, the collateral damage to Samsung’s brand and reputation could add billions more to its losses over time. Samsung is the largest Android OEM in the world, according to IDC estimates. And while the Galaxy Note is not as popular as the Galaxy S series, the negative halo will likely impact sales of the smaller device as well.
All of this comes as Google has launched the iPhone-like Pixel together with a big ad blitz for the device. Some of the Pixel models (blue) are already sold out. Accordingly, it should sell very well and could take the Galaxy’s place as the top-selling premium Android device.
Google has a stronger reputation than Samsung, and the latter’s recent troubles will cement that and benefit the Pixel. The device is being touted as the “first real Google phone.”