Samsung's India revenues could suffer a loss of Rs 6,457 crore due to recall of its flagship Galaxy Note 7, according to the Research firm CMR. The claim was disposed of by the Korean major.
"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 previous calendar year. However, following the Note 7 issue, it can earn revenues of Rs 38,989 crore, which means a growth of 25 per cent in revenues in CY2016," the
Debunking the report, a Samsung India spokesperson said the company is "appalled by the incorrect reporting of company's financials based on reports by various research agencies".
"The reports covered in some news articles quote different revenue loss estimates for Samsung India. These research reports are not based on empirical facts. Such projections by any research agency or analyst, therefore, is incorrect," he added.
Samsung had unveiled the Galaxy Note 7 in July in India with a price tag of Rs 59,900, but delayed selling the handset in the country 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 but the battery fiasco derailed the launch plans.
"Samsung has not sold Galaxy Note 7 in India. However, we can confirm that contrary to these reports, we are headed for record sales of mobile phones this year," the spokesperson said.
The CMR report, however, added that Samsung will continue to maintain its leadership in the Indian smartphone segment, but its market share will shrink by 4.2 per cent and settle at around 25.5 per cent instead of estimated 29.7 per cent.
"Though Note 7 is a high-end premium smartphone, the impact would be on Samsung spanning all across the segments," CMR Principal Analyst for Telecoms Faisal Kawoosa said.
The issue is faced with the flagship model of the year, that too around festive season and as a result, customers' confidence is shaken, he added.
"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," Faisal said.
Following the global recall and later halt in production, the world's largest smartphone maker cut its quarterly operating profit forecast by a third to 5.1-5.3 trillion Korean won, translating into a hit of a whopping 2.6 trillion Korean won or USD 2.3 billion.
The global consolidated sales estimate has also been lowered by 2 trillion Korean won (USD 1.7 billion) to approximately 47 trillion Korean won, after the company decided to permanently halt sales of the troubled Note 7 device, in less than two months after its launch.