Samsung Electronics announced a recall of its Galaxy Note 7 devices earlier this month, after reports that some units were exploding due to a battery defect. U.S. regulators joined the process last week, with the Consumer Product Safety Commission working with Samsung on the recall and urging owners of the Note 7 to stop using their devices. While we currently estimate the cash costs of the recall to come in at a little over $900 million (see calculations below), the opportunity cost for Samsung could be much higher, given the strong momentum that the firm’s smartphone unit had been witnessing in recent quarters. Samsung’s stock has declined by roughly 5% since the recall was announced earlier this month, wiping off over $10 billion of the company’s market cap. The Note 7 was touted as one of Samsung’s most cutting-edge devices, and its recall could call into question the company’s broader quality and safety standards. The negative news cycle around Samsung’s flagship product could also steer potential customers towards Apple’s new iPhone 7, which goes on sale on September 16.

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