Samsung Note 7 recall hit: at least $5.3 billion

NEW YORK—It was evident that explosive Galaxy Note 7 smartphones would have a negative impact on Samsung Electronics' bottom line, not to mention the South Korean company's reputation. Now we have a sense of just how much, at least financially.

Samsung indicated Friday that pulling the plug on the Note 7 will cost approximately $3 billion in the fourth quarter of this year through the first quarter of 2017, raising total costs from the recall to at least $5.3 billion.

Samsung said it is "releasing these estimates to inform the market on the impact."

For now, Samsung will heavily push its other flagship smartphones, the Galaxy S7 and Galaxy S7 edge, highly regarded phones that lack some of the features the Note 7 had, notably a stylus and the ability to unlock the phone with your iris.

If Samsung sticks to its usual release cycles, it could announce a new Galaxy S series phone during Mobile World Congress, a major industry trade show held late February in Barcelona, soon enough to raise questions about how well the S7 devices might sell. Meantime, the future of the Note branded devices--in the past, Samsung has released these phablet devices in late summer--is less clear.

In a statement, Samsung said that "the company will focus on enhancing product safety for consumers by making significant changes in its quality assurance processes."

Samsung killed the Note 7 on Tuesday after replacement phones deemed safe after an initial recall also caught on fire. In the wake of the Note 7 disaster, Samsung earlier this week Samsung announced that it was downgrading its third-quarter profit forecast by $2.6 billion. Analysts estimate that the initial recall of more than 2.5 million phones has cost the company between 1 trillion won to 2 trillion won.

Samsung is still apparently investigating the cause of the problem,  which the U.S. Consumer Product Safety Commission said led to 96 reports of batteries that overheated.

Samsung recalls Note 7 replacement phones in U.S.

What's more, Samsung received 13 reports of burns and 47 reports of property damage associated with the Note 7s. Samsung, U.S. carriers and retailers and Federal regulators have urged people to return the phones, either for a full refund or for another phone. Samsung is giving consumers who swap the device for another Samsung handset a $100 credit. Consumers who switch to a phone from a rival manufacturer will get a $25 credit.

Email: ebaig@usatoday.com; Follow USA TODAY Personal Tech Columnist @edbaig on Twitter