Samsung is too much of South Korea's GDP to go bankrupt. For Samsung to fail, the Korean economy would have to also fail, which is possible but unlikely.
I think that if you compare Samsung's Note 7 to Nokia's Burning Platform, the prospects for Samsung are significantly better (Nokia not only destroyed the value of 100% of their inventory but also all of their future inventory until the OS changeover happened; Samsung has a branding problem but can release another device).
Honestly, they should just rename it to something else (at the very least not the Note, but maybe even call it something other than Samsung in the US).
Edit: I do agree with your supposition that mobile is the primary revenue driver for Samsung, but I don't actually think they're generating a profit from mobile any more. I continue to contend that the only company that makes a profit on mobile is Apple and they continue to dominate that market for reasons that are fairly obvious (supply chain, silicon superiority, and software that works faster for the workloads consumers run on their devices).
Samsung hovers around what 20% of South Korean GDP?
Nokia was around 4-5% of Finland and some say its loss was the best thing to happen of the country's tech sector. I haven't seen any real analysis however.
Isn't that backwards? (ie. if Samsung failed, South Korea's economy would take a massive hit?)
I think this will hurt Samsung significantly but not fatally. They'll come back with a nice fancy new phone (although they may not re-use the Note moniker) and they'll price it at barely above break-even to encourage people to give them another chance, and people will love them again.
> Isn't that backwards? (ie. if Samsung failed, South Korea's economy would take a massive hit?)
They are both true. If Samsung faltered, the Korean economy would take a hit, but the government would almost certainly prop it up such that it wouldn't actually fail.
Presumably a bailout would take the form of an injection of liquidity sourced from sovereign debt denominated in KRW, much like the US bank bailout a few years ago. If it were large enough, it could depress the won against other global currencies. In the limiting case, the Koreans can always -- if they really need to -- print money until their exports get attractive again. People may not want to buy Samsung phones, but they'll certainly buy Samsung steel or Samsung heavy industrial equipment, if the price is right.
Countries can do this funny thing called "print money" to save failing businesses. Sure, that's bad for the economy too, but potentially better than the alternative.
I think that if you compare Samsung's Note 7 to Nokia's Burning Platform, the prospects for Samsung are significantly better (Nokia not only destroyed the value of 100% of their inventory but also all of their future inventory until the OS changeover happened; Samsung has a branding problem but can release another device).
Honestly, they should just rename it to something else (at the very least not the Note, but maybe even call it something other than Samsung in the US).
Edit: I do agree with your supposition that mobile is the primary revenue driver for Samsung, but I don't actually think they're generating a profit from mobile any more. I continue to contend that the only company that makes a profit on mobile is Apple and they continue to dominate that market for reasons that are fairly obvious (supply chain, silicon superiority, and software that works faster for the workloads consumers run on their devices).