Apple’s stock has shot up following Samsung’s scrapping of its flagship Galaxy Note 7 device.
Samsung is Apple’s main competitor in the smartphone market and the Note 7 was intended to battle the iPhone 7 for majority market share. However, the device suffered from a battery fault which caused the devices to overheat, with many catching fire.
Apple’s stock closed on Monday 9 October up 1.9 percent at $116.05 following rumors that the device was on its way to being canned. If that standalone number doesn’t mean much, it’s the highest value Apple’s achieved since December 2015, and up 20 percent over the last few months.
It’s thought that it’s partly the market readjusting to better than foreseen reception and sales of the iPhone 7, but, especially now, due to its competitor’s implosion.
As reported by Reuters, Samsung has totally scrapped the Note 7, telling users to power down their devices and return them for another Samsung model. Samsung had first recalled 2.5 million Note 7 devices at the start of September, reissuing the device with new batteries made from a different supplier. However, following more reports of fires in October, the South Korean tech-manufacturer has scrapped the device entirely.
It’s believed the move could cost Samsung up to $17 billion and stain the brand’s reputation across its product line. The company has now had $20 billion wiped from its value by investors, experiencing its biggest daily decline since 2008.
Of course, it’s not only Apple that’s benefitting from Samsung’s hard times, the timing couldn’t be much better for Google and its new Pixel phone. The self-destruction of the Note 7 and the serious damage to Samsung’s brand could provide just enough room for Google to squeeze into the smartphone market; providing an alternate device and brand for users that don’t wish to take up with Apple.
However, for now, the stock uptake does appear to suggest the markets currently view Apple as the only viable, large-scale smartphone provider.