Mobile

OS Loyalty May Dent Apple’s Benefit From Galaxy Note 7 Woes

Samsung’s move to end production of the Galaxy Note 7 OS Loyalty May Dent Apple’s Benefit From Galaxy Note 7 Woes a big phone gap that AllianceBernstein Analyst Toni Sacconaghi expects other handset makers to fill.

According to a report by CNBC, Sacconaghi said the end of the Galaxy Note 7 leaves a 25 million phone gap in Samsung’s business that other handset makers are more than willing to step up and fill. While that could mean Apple and its iPhone 7, Sacconaghi noted that, typically, Android users aren’t willing to switch to a new operating system, which they would have to do if they moved to an iPhone.

“Maybe 20 percent of these users, as a wild guesstimate, might defect to Apple, and that would be an incremental 5 million units,” Sacconaghi told CNBC’s “Squawk on the Street,” noting that, by and large, users tend to remain loyal to the operating “ecosystems” of their existing smartphones, which may limit Apple’s potential to benefit from Samsung’s woes.

Samsung announced on Tuesday (Oct. 11) that it was discontinuing production of the troubled Galaxy Note 7, after fresh reports surfaced that the replacement Galaxy Note 7 devices were experiencing similar problems with catching fire. The Galaxy Note 7 was blamed for the evacuation of one Southwest flight and resulted in another user ending up in the hospital due to smoke inhalation. First, Samsung advised consumers to stop using the phone and then announced it was ending production of what was expected to be a huge hit for the leading smartphone maker. Samsung’s stock took a big dive on Tuesday, falling more than 8 percent at one point and closing 7.5 percent down for the company’s biggest one-day decline in eight years, according to The Wall Street Journal.

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