Samsung Note 7 Issues to Cost $3 Billion in Lost Sales for Phone Company

samsungSamsung has announced that its Galaxy Note 7 recall will cost them approximately $3 billion as a result of discontinued sales.

After weeks of reports that the device was overheating — and even bursting into flames — the South Korean company halted production early last week. Issues were thought to have been resolved when replacements were issued, but those too began to overheat and catch fire.

The company expects most of the lost sales to hit bottom during the next quarter. Unfortunately, that also means some will carry over into the first quarter of 2017.

Approximately 82% of businesses operating in 2013 were still operational as of 2014, but even those businesses never had to deal with the issue of products literally exploding in their consumers’ hands.

Samsung issued an official recall of all Note 7 products after September 15, but was still criticized for not formally recalling the device earlier.

In addition, the company has faced criticism for not alerting their customers to the potential safety concerns the phones presented.

After talks with safety officials, Samsung reported that it was “adjusting the production schedule to ensure quality and safety matters.”

To add insult to injury, two mobile networks in the U.S. have stopped replacing or selling the Note 7.

AT&T and T-Mobile have both made announcements that they will no longer be providing the Note 7 to customers.

T-Mobile has halted all sales of the product, and will not begin to do so again until Samsung concludes its investigation into the issues. In addition, they will not be providing new Note 7 models for those customers who wish to exchange them.

On the other hand, AT&T reported that it would simply halt all exchanges for new Note 7 phones until the company’s investigation concludes.

Samsung released a statement that described the issue as a “rare” manufacturing error, but more incidents have arisen since, including one on a domestic flight in the U.S. and a man in Kentucky who reportedly awoke to a bedroom filled with smoke emanating from his new Note 7 phone.

The company has since announced that it would focus on its other flagship models such as the Galaxy S7 and Galaxy S7 edge to make up for the money lost on the Note 7.

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