With Samsung’s Note 7 off shelves, here’s who wins

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Samsung relinquished a $9.5 billion opportunity ahead of the holiday season with its decision to stop sales and production of its Galaxy Note 7 — and other smartphone makers are waiting in the wings.

Apple, Google, LG and Chinese handset makers could be among the winners as Note owners look to exchange their phones, experts told CNBC.


Neil Shah, research director of devices and ecosystems at Counterpoint Research, told CNBC he believes that most Note 7 owners will go to Apple, which just released its iPhone 7 model. Indeed, Apple’s stock, rising 2 percent, contributed the most gains on the Dow Jones industrial average Tuesday morning.

“Those are premium customers who prefer a premium brand,” Shah said.

Angelo Zino, equity analyst at CFRA Research, also predicted higher switching rates from Android to Apple over the next 12 to 18 months as Samsung’s issues weigh. Tim Long, managing director at BMO Capital Markets, concurred.

“Part of our thesis on Apple all along has been, they are taking a good amount of market share from Samsung at the high end, and even from some other brands that are moving up-market,” Long told CNBC’s “Power Lunch” on Monday.


The maker of the Android platform used by Samsung, Alphabetrecently stepped up its smartphone offerings with the Pixel phone.

Verizon CEO Lowell McAdam said on Monday in an interview with CNBC that most customers using the Android operating system are very loyal, and so Samsung’s other phone, the Galaxy S7, and Google’s Pixel, are both selling. Vivek Wadhwa, professor at Carnegie Mellon University’s College of Engineering, also sees the Pixel as Samsung’s real threat.

Other Android makers

High-end smartphone makers are increasingly seeing competition among mid-tier offerings from companies like LG, and Chinese brands like Huawei, OPPO and others.

While Samsung and Apple shipped the highest volume of smartphones worldwide in the second quarter, by IDC estimates, firms like OPPO and Vivo are seeing big growth.

“Outside of Samsung’s Galaxy S7 flagship, a majority of vendors, including Apple, have found success with more affordable models compared to their flagship handsets,” said Anthony Scarsella, research manager of mobile phones at IDC, said when the data was released in July.

— Reporting by CNBC’s Arjun Kharpal. Julia Boorstin and Saheli Roy Choudhury contributed.

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