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Galaxy Note 7 fiasco to not affect rising component prices

Samsung Electronics Co.'s unprecedented global recall and halt in production of its Galaxy Note 7 may cause changes in the shipments of major smartphone brands, but the discontinuation of Note 7 sales will not affect the upward price trends for key smartphone components, a report said Monday.

According to the report compiled by market researcher TrendForce, Samsung has produced about 4 million Note 7s since its sales earlier this year. The original production volume forecast of the device for all of 2016 was between 10 to 12 million units.

"The halt of Note 7 sales will furthermore alter the market share of smartphone brands in the large-size model segment. A substantial portion of consumer demand will now go to the three major Chinese brands ? Huawei, Vivo and OPPO. The withdrawal of the Note 7 from the market will also benefit the sales of the iPhone 7 Plus that was just released in September," it said.

TrendForce said Samsung's announcement may boost the prices of key components by intensifying supply shortages.

Samsung's announcement will not stifle the price increases for key smartphone components such as DRAM, NAND Flash and AMOLED panels. Rival brands are anticipated to take advantage of Samsung's crisis and expand their smartphone production, it said.

"This in turn would aggravate the supply shortage situation in the component markets. Thus, memory prices will not only continue to rise but actually also surge higher than expected," it said.

Following the withdrawal of the Note 7 from the market, Samsung is expected to accelerate the sales of its other smartphones. To make up for the shipment losses, Samsung is expected to shift its marketing resources and promotional efforts to other Galaxy smartphone series, such as the Galaxy S7.

"To stay in profit, the technology conglomerate may increase the prices of its memory and panel components which have a dominant market share worldwide," it said.


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