Samsung will lose, but not to Apple: Experts

Bill George: Samsung risking 'tremendous damage to a great brand'

Samsung's loss in profits this quarter cannot and will not compare to the brand damage the company faces in light of its Galaxy Note7 debacle, leadership expert Bill George says.

The former chair and CEO of Medtronic said the company would be wise to publicly apologize to its U.S.-based customers and possibly even appear before Congress to avoid severe repercussions.

"Look, companies have problems, they have difficulties, but you better get the fix right. They didn't have their engineers get to the root cause, no one came to the U.S. to find out what the real problems were," George, who is a senior fellow at Harvard Business School, said on CNBC's "Squawk on the Street" on Wednesday.

And, if the company doesn't deal with this crisis effectively, George said the electronics giant could end up just like Volkswagen — with "tremendous damage to a great brand."

Looking forward, Samsung has halted production of the Galaxy Note7 entirely, leaving a 25-million-phone gap in its business that other smartphone producers are eager to fill, technology analyst Toni Sacconaghi says.

George said the company is likely to lose a large portion of its shares to LG Electronics, Huawei and Google when its Android smartphones hit the market.

Sacconaghi, Alliance Bernstein's senior technology analyst, said that historically, it is unlikely Android users would be willing to switch to a new operating system like Apple's.

Sacconaghi: There's a high percentage of ecosystem loyalty

"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" on Wednesday.

Both Sacconaghi and George echoed that for the most part, users tend to stay loyal to their smartphones' operating "ecosystems," which makes it unlikely that Apple stands to benefit the most from Samsung's issues.

George pinned the larger problem on Samsung's leadership, saying that the lack of executives at the South Korean company that are able to speak for U.S. consumers cripples the company's ability to understand how crises unfold in the U.S. marketplace.

"They need more diversity advising them and the executives need to get over here and engage in the marketplace, talk to real consumers, get into stores," George said.

Otherwise, George said, the company will have to not only lose $2.3 billion in operating profits and billions in market shares, but its reputation as well.