Last week Samsung Electronics revealed a plan to recall 2.5 million Galaxy Note 7 devices. The smartphones have been reported as having exploding batteries.
As Apple unveils its new iPhone lineup tomorrow, estimates from Credit Suisse Group, Daishin Securities, and Pelham Smithers Associates suggest the cost of Samsung’s recall could reach $1 billion.
That’s a steep price tag, but the real worry could be the potential damage to Samsung’s reputation, which may be a greater long-term cost.
Koh Dong Jin, the head of Samsung’s smartphone business, said the recall—specifically the financial impact—was “heartbreaking.”