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Samsung’s Galaxy Note 7 disaster won't be the end of the company

Published 10/10/2016, 02:04 PM
Updated 10/11/2016, 04:39 AM
© Statista

Well, if you’re Samsung (KS:005930), apparently not. Even after multiple replacement models of the Galaxy Note 7 appear to have combusted like the original — forcing major carriers to stop selling the phone and Samsung to reportedly suspend its production — the company’s stock has only dipped 1.5% by midday Monday. Even that's an understatement: That stock hit an all-time high just last Friday, while the company was still in the midst of the mess.

This chart from Statista shows how this might be possible. Though the Galaxy Note 7 was a major launch for Samsung’s smartphone business, it still represents a fraction of its overall sales, and the business itself remains the largest in the world. More importantly, the company has its finger in many other pies — it’s a major producer of semiconductors, OLED displays (which appear to be in demand), TVs, refrigerators, and many other appliances. It's huge.

That said, this is a public relations nightmare. There are people who now equate “Samsung Galaxy” with “the phone that explodes,” and that'll only help rivals like Apple (NASDAQ:AAPL) and, now, Google (NASDAQ:GOOGL). Is it bad enough to tank the company, though? Right now, probably not.

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