Samsung's total recall of its Note 7 smartphone and the subsequent production halt is likely to hit the company’s revenue in India by about Rs 6,500 crore, according to research firm CMR.
CMR said that as per its impact analysis, the Korean electronics major may fall short of its shipment target for calendar year 2016 by four million units due to the Note7 battery issue that led to discontinuation of the model’s sales.
“This translates to Rs 6,457 crore in terms of revenues for the company. As per projected growth, Samsung was expected to touch revenues of Rs 45,446 crore in CY2016, an increase of 46 per cent compared to the previous calendar year,” the research firm said in a report.
However, following the Note 7 issue, it can earn revenues of Rs 38,989 Cr, which means a growth of 25 per cent in revenues in CY 2016, it added.
As per CMR, Samsung will continue to maintain leadership in the smartphone segment in India. However, the company’s market share is likely to shrink by 4.2 per cent points and settle at around 25.5 per cent instead of estimated 29.7 percent.
“Though Note7 is a high-end premium Smartphone, the impact would be on Samsung spanning all across the segments. The issue is faced with the flagship model of the year, that too around festive season and as a result, customers’ confidence is shaken,” Faisal Kawoosa, Principal Analyst for Telecoms at CMR said, adding that a perception, right or wrong, gets built within the market that if the issue is with the high-end premium model, there could be issues in the other models too.
Samsung had unveiled the Galaxy Note 7 in July in India with a price tag of Rs 59,900, however, it had delayed selling of the handset after cases of battery exploding while charging were reported in various countries. The device was to be made available in the Indian market from September.
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