Apple iPhone 7 and Huawei To Reap Maximum Benefit From Note 7 Recall

Apple stock

Apple Inc. and Huawei will benefit the most from the massive recall of the Samsung Note 7 device. Top analyst Ming-Chi Kuo predicts that 5m to 7m ex-Galaxy Note 7 users will switch to the iPhone 7. Citing the KGI Securities analyst, 9to5 Mac’s Benjamin Mayo notes that most switchers will go for the higher-end iPhone 7 Plus because of its dual-camera.

Samsung’s trouble a boon for Apple and Huawei

Several reports claimed the batteries on the Galaxy Note 7 were getting overheated, catching fire, and even exploding in a handful of cases. This forced the Korean firm to expand its existing recall of 1m phones in the US. The recall of the now-discontinued phone will help Apple win millions of mobile customers as per Wall Street’s predictions and Kuo.

Apple Inc AAPL iPhone 7

Also, an analyst with Drexel Hamilton named Brian White estimates that Apple will be able to sell at least 8m extra units this calendar year. This will come from the 10m to 14m Note 7 phones, which the analyst believe have been sold in the second half of the year.

Apple Inc. will need about 3-5 weeks to accommodate additional orders of the iPhone 7, especially “if the company does not expand the current production capacity of the iPhone 7 Plus,” Kuo estimates.

Also, the report noted that the Chinese smartphone maker Huawei will benefit from Samsung’s recall as well. Based on IDC estimates, Huawei ranks third – after Apple and Samsung in terms of worldwide smartphone shipment volume in the Q2. It will launch the Mate 9 in the fall, and Kuo believes it will be the best alternative for the Note 7 users, who wish to continue using the Android OS, but are no longer interested in Samsung devices.

Samsung must not repeat

Kuo noted that the discontinuation of the Note 7 will not have a long-lasting impact on Samsung. But, if the Korean firm repeats the mistakes on the Galaxy S8 device, then its brand will be hurt immensely. The next device will enter mass production in Q1 2017, expectedly.

Samsung will be more patient with the S8 because the smartphone’s 10 nm production is facing yield issues, notes Kuo. Also, the Korean firm will make greater efforts with quality control as a whole after seeing the disaster that happened with the Note 7 due to rushing with production.

A Bloomberg report accused Samsung of rushing with the production of Note 7 so that it could be launched against Apple Inc. ’s iPhone 7. There were rumors before iPhone 7’s launch that the device will not receive a major design change. It turned out to be true later, and could have benefited Samsung as the Note 7 would have been an enticing alternative to users on the fence.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.


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