Hey, you know what Samsung is also burning after the Galaxy Note 7 fiasco? $2.3bn

That's nearly five Samsung-Apple patent lawsuits


The extraordinary cost of the Galaxy Note 7 recall and withdrawal has been revealed in the latest financial figures from Samsung.

On Wednesday, the company revealed its preliminary third-quarter earnings and slashed estimated operating profit from 7.8 trillion Korean won to 5.2 trillion won.

The difference is US$2.3bn, almost all of which can be attributed to the disastrous rollout of the company's new smartphone, the Galaxy Note 7; then a massive battery replacement program after a significant number of explosions; and then a complete recall and possible scrapping of the brand altogether after those replacements were also found to be faulty.

Even worse, the full cost of the recall may be much higher. The previous earnings figures, according to a Samsung spokesperson, had accounted for the recall; the new, lower figures are the company's estimates for how many customers will demand a refund for their Note 7 rather than accept an exchange for a different Samsung phone. The real total cost of the Galaxy Note 7 might be as much as $4bn.

The revised figures caused the company's share price to drop yet again: over the past three days it has fallen 10 per cent, wiping roughly $19bn off its overall value.

We're told that Samsung has built 2.5 million Galaxy Note 7 phones, all of which will mostly be scrapped. The South Korean giant decided to glue the handheld's battery in place in this model, rather than make it easily replaceable. When it turned out the battery had a serious design flaw, it was impractical to unglue and replace the power packs again and again – simply, the whole line had to be recalled and destroyed.

Thinking inside the box

In the meanwhile, Note 7 customers have been receiving special fireboxes in which to send back their potential bombs.

While many Note 7 customers have been returning their phones to the retail outlets they bought it from, many bought it direct from Samsung. They quickly found, however, that FedEx and UPS refused to accept the returns out of fear that they could explode.

And so Samsung has sent out a rather unusual recall box. It comes with instructions. You need to power off your phone/mini-bomb, then put it in an anti-static bag and place it inside a cardboard box. Then you have to put that box inside another cardboard box. And then that box goes inside a special firebox with ceramic fiber insides.

Even better, because that ceramic fiber is not the nicest of materials, the kit comes with a pair of latex gloves so you don't scratch up your skin. You can see the whole kit online.

Youtube Video

Even with all of this however, you are informed that the box can only be sent by truck – the box is not welcome on any planes. And for good reason. ®

Similar topics


Other stories you might like

  • Minimal, systemd-free Alpine Linux releases version 3.16
    A widespread distro that many of its users don't even know they have

    Version 3.16.0 of Alpine Linux is out – one of the most significant of the many lightweight distros.

    Version 3.16.0 is worth a look, especially if you want to broaden your skills.

    Alpine is interesting because it's not just another me-too distro. It bucks a lot of the trends in modern Linux, and while it's not the easiest to set up, it's a great deal easier to get it working than it was a few releases ago.

    Continue reading
  • Verizon: Ransomware sees biggest jump in five years
    We're only here for DBIRs

    The cybersecurity landscape continues to expand and evolve rapidly, fueled in large part by the cat-and-mouse game between miscreants trying to get into corporate IT environments and those hired by enterprises and security vendors to keep them out.

    Despite all that, Verizon's annual security breach report is again showing that there are constants in the field, including that ransomware continues to be a fast-growing threat and that the "human element" still plays a central role in most security breaches, whether it's through social engineering, bad decisions, or similar.

    According to the US carrier's 2022 Data Breach Investigations Report (DBIR) released this week [PDF], ransomware accounted for 25 percent of the observed security incidents that occurred between November 1, 2020, and October 31, 2021, and was present in 70 percent of all malware infections. Ransomware outbreaks increased 13 percent year-over-year, a larger increase than the previous five years combined.

    Continue reading
  • Slack-for-engineers Mattermost on open source and data sovereignty
    Control and access are becoming a hot button for orgs

    Interview "It's our data, it's our intellectual property. Being able to migrate it out those systems is near impossible... It was a real frustration for us."

    These were the words of communication and collaboration platform Mattermost's founder and CTO, Corey Hulen, speaking to The Register about open source, sovereignty and audio bridges.

    "Some of the history of Mattermost is exactly that problem," says Hulen of the issue of closed source software. "We were using proprietary tools – we were not a collaboration platform before, we were a games company before – [and] we were extremely frustrated because we couldn't get our intellectual property out of those systems..."

    Continue reading

Biting the hand that feeds IT © 1998–2022