On the surface, the Samsung Galaxy Note 7 was supposed to be the finest piece of technology produced by the South Korean technology giant. Widely anticipated by stalwart Samsung fans and newcomers to the brand alike, the phone was meant to finally be the device that toppled Apple’s position as the world’s most valuable company.

The company was so confident that they could take a bite out of Apple that rushed the phone straight from R&D to the production line in order to beat their bitter rival to an earlier release date. Then it back-fired. Literally.

After the August 19 announcement of the Note 7, 200,000 pre-orders in two days by South Koreans broke domestic records with shortages of supply reported in many markets across the globe. So far so good. But reports of Note 7s catching fire prompted a delay of shipments only three weeks later. Fast forward a fortnight and the company issues an unofficial recall of all models, endeavouring to replace over 2.5m units.

Next, the US Federal Aviation Association warns against the general use or charging of the phones on flights. And, even more damning, the US Consumer Product Safety Commission begins to investigate. In the meantime, Apple releases the iPhone 7.

Then, the final straw. A replacement model catches fires at an airport on October 5, perhaps even more worrying considering phone was already turned off. Unable to find a solution, yesterday Samsung pulled the plug on the Galaxy Note 7.

The results? The company expects the cost of the saga to amount to $2.3bn whilst shares have fallen 9%, wiping a further $18bn from market value.

Will Samsung be able to recover from this before Christmas?

It seems unlikely. Once a line of products begins to spontaneously combust, one would imagine that trying to convince an angry consumer £700 out of pocket and with a hole in the dining room table to buy another is equivalent to going 12 rounds with Mike Tyson.

Furthermore, with tech conglomerate Google stepping up to the plate with the announcement of its first phone, the Pixel, the timing could not be worse for Samsung.

Yet this could be a drop in the ocean compared to the long-term financial impact of the Galaxy Note 7 debacle. Fresh in the memory, the VW diesel emissions scandal has seen the reputation of a formerly unblemished global producer to become embroiled in a lengthy battle with the US Department of Justice. Even BP’s Mexican Gulf spill has continued to cast a shadow on the oil giant’s reputation (and cheque book), not helped in the least by the release of a Hollywood blockbuster dramatising the events.

Could it be time to look to one of Samsung’s competitors to pick up the 22% global market share of smartphones? Hot on the heels of Apple in third place is Huawei, enjoying an almost 2% increase in market share in the last year alone. The emergence of (relative) tech old-timer Google into the smartphone market could prove to underpin Samsung as the Android flagbearer entirely. All the while Apple continues to go from strength to strength; from new product to new product.

Has Samsung sung its last song?

Henry Croft, Research Analyst, October 12