SABRINA VERDUZCO WRITES – In the smartphone showdown between Samsung and Apple, iPhones have the global upper hand, but in South Korea, Samsung has been reigning supreme. So it is no surprise that the consumer safety recall of exploding Samsung Galaxy Note 7 smartphones has sparked a panic.
Videos of the Galaxy Note 7 spontaneously combusting while left charging unattended at users’ homes or in public spaces have quickly gone viral.
In South Korea, Samsung comprises approximately 20% of the country’s gross domestic product, and its products are ubiquitous: Koreans cook in kitchens with Samsung refrigerators; in living rooms, families watch reality TV on their Samsung televisions; and in the mall, they can buy a new pair of pants with their Samsung credit card.
The Galaxy recall has left many wondering how bad a hit the economy will take, as reports of expected losses of up to $15 billion have surfaced since the recall began.
Because of Samsung’s presence in South Korea, it’s no surprise that Seoul is a major exporter for Samsung. However, the smartphone’s recall is inevitably going to have a “negative impact on exports” if the company decides to scrap the model altogether, says Finance Minister Yoo Il-ho.
This screen displays the Korea Composite Stock Price Index (KOSPI) and Korean Securities Dealers Automated Quotations (KOSDAQ) at the Korea Exchange in Seoul, showing how low South Korea’s benchmark fell following reports of the recall.
In the wake of South Korea’s Samsung Electronics’ decision to discontinue production of Galaxy Note 7 smartphones, concerns over the company’s global shares continue to grow as share prices drop.