How Do Galaxy Note 7 Issues Impact Other Companies?

SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF) has decided to permanently end production of its Galaxy Note 7 smartphone, and the company's decision will impact members of its supply chain and competitors.

In a research report on Tuesday, Goldman Sachs' Simona Jankowski took a look at what impact, if any, will be felt by Apple Inc. (NASDAQ: AAPL), QUALCOMM, Inc. (NASDAQ: QCOM) and Corning Incorporated (NYSE: GLW).

Apple: Potential Share Gains

According to Jankowski, every one million iPhone 7 Plus units sold to clients who otherwise would have bought the Note 7 would translate to $770 million in incremental revenue for Apple and $0.03 in earnings per share.

Related Link: Galaxy Note 7 News Has Apple Shares On Fire Again

The analyst originally estimated Samsung to sell 10 million Note 7 units prior to the battery issue was first reported. After the battery issue was brought into the spotlight the analyst lowered her estimate to 6 million units sold.

Granted, Apple won't capture the entire 10-million-unit shortfall as it will be shared with other high-end Android competitors and even by Samsung's other high-end device, the Galaxy S7 Edge.

Qualcomm: Modest Near-Term Negative

Jankowski noted that Qualcomm supplies components to 50 percent of all Note 7 devices. Granted, Qualcomm likely also supplies components to devices that consumers will now pick instead of the Note 7, the company derives a higher selling price in Samsung's flagship devices of around $60. By comparison, Qualcomm's average selling price to Apple and other Android devices is around $20.

The analyst is now modeling a "modestly negative" revenue impact for Qualcomm of $65 million, or 1 percent of total revenue and an earnings per share impact of ($0.01).

Corning: Negligible Impact

Finally, Corning also supplies its cover glass called Gorilla Glass 5 to the Note 7. Similar to Qualcomm, the analyst expects most units will be recaptured by other smartphone makers but the content per device could present a risk to Corning.

However, Corning's total Glass revenue is around 8 percent of total revenue, so the impact to the company would "likely be negligible."

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