Samsung Could Lose 5m Customers to Apple

While Samsung may be going through one of the worst public relations disasters its mobile division has had, Apple will most likely cash in on the situation.

Samsung has cancelled all production of the Galaxy Note 7, which necessarily means customers will either have to choose another Samsung phone, or get a refund and purchase a phone from another manufacturer.

According to KGI Securities analyst Ming-Chi Kuo, for as many as 5 million to 7 million people, that manufacturer will be Apple.

Reports suggest millions will flock to the iPhone 7 Plus because of the dual camera, which makes the Plus an attractive buy for many people that might have bought the Note 7 for its camera in the first place, according to Digital Trends.

What this implies is that as many as 50% of Galaxy Note 7 buyers could be convinced to switch over to an iPhone—initially as many as 12 million Galaxy Note 7s were sold. The other 50% of customers will be shared among manufacturers like Huawei and Google, which is selling its first-ever self-built device.

It is difficult to tell exactly how buyers of the Galaxy Note 7 will react to the situation. Many users have declined to turn in their device despite the warning that it could catch fire.

While Kuo says the issue will not affect Samsung for more than a few months, the report notes that another series of similar issues could be disastrous to the Samsung brand as a top-tier phone manufacturer.

Apple stock has soared over the past few weeks—largely because of the Galaxy Note 7 issues. Apple will likely see an excellent fourth quarter of 2016 and even first quarter of 2017. We may begin to see the effects of the Galaxy Note 7 issues on Apple when Apple reports its earnings to investors on October 25.