Apple Living in the Moment

APPLE IS CAPITALIZING on the recent troubles with Samsung’s Galaxy Note 7, with increased sales as some Samsung users defect to Apple products.

For those of you who are not aware, Samsung rolled out its Note 7 merely a few weeks ahead of iPhone 7’s expected release; hoping to capitalize on a few weeks with no competition. This plan backfired heavily, resulting in, well, fire.

Samsung as well as the Federal Government issued official recalls only days after the release of the iPhone 7, after widespread cases of the phone spontaneously combusting popped up across the United States. The recall is for a full refund or exchange, but the supplies of new safe Note 7’s have been lacking.

All of this have put early adapters of the Note 7 in a tough spot, and many disillusioned with the Note 7 have started looking to other options.

Namely the iPhone 7

A survey of 507 adults who purchased the Note 7 finds that 26% of users plan on taking their refunds straight to the competition. While 21% say they will switch to a different Samsung model, only 18% planed on exchanging the device for a healthy Note 7. Still, 35% said they will keep the refund but are not sure on their next phone of choice.

These numbers are far worse than Samsung’s own polls are predicting, claiming that nearly 60% of all defective devices in the States and South Korea have been successfully traded in for the corrected model. And more optimistic still, they forecast that nearly 90% of all Note 7 buyers will continue their loyalty to Samsung.

The Jury is still out

The exact impact that the recall will have on both Apple and Samsung sales will have to wait until the companies present their respective quarterly reports. Though analysts have been hotly debating who will come out on top, with many putting their bets on Apple, with shares going up 5% over the past month as the Note 7’s problems have widened.

Even if the numbers of defectors are as high as some claim, it will likely not make a huge dent in Apples payday, as they already outsell Samsung in the United States with tens of millions of Apple users.

However, Samsung will not nearly be so callous with their bottom line, with the recall estimated to cost nearly $5 billion in lost revenue, combined with the loss of customers, deterioration of consumer trust, and the inevitable lawsuits to come.