Samsung will take $5.3 billion hit from Note 7 recall

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Galaxy Note 7 water wet
The Note 7 is all washed up.
Photo: Killian Bell/Cult of Mac

Issuing a global recall for the Galaxy Note 7 is going to cost Samsung even more money than it expected.

Samsung released a statement to investors today revealing that its fiery phablet will hurt overall profits for the next two fiscal quarters, costing the company a total of $5.3 billion.


The South Korea-based company already disclosed on Wednesday that it is projected to lose $2.3 billion in third-quarter profits. Then the company revealed today that the recall will have an additional negative impact of $3 billion through March 2017.

Multiple reports from owners of the Galaxy Note 7 revealed the device has a defect that can cause some units to burst into flames. Samsung hasn’t revealed what causes the phones to catch fire. But after replacement units of the Note 7 also blew up on planes and cars, the company finally issued a recall.

“Moving forward, Samsung Electronics plans to normalize its mobile business by expanding sales of flagship models such as the Galaxy S7 and Galaxy S7 edge,” Samsung said in a statement. “Additionally, the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes.”

All production of the Note 7 has stopped. Samsung plans to basically wipe the phone out of existence, though some fans are buying Note 7 boxes as collectors items.

Customers who bought the Galaxy Note 7 can return it to their carrier or Samsung. The company even includes a flame-proof box to ship it back in.