Samsung burned by Note7 recall but reputation intact

Credit: Retuers

Manufacturer praised for its reaction to reports new model was catching fire

This month’s worldwide recall of the Galaxy Note7 smartphone will do very minimal damage to Samsung’s reputation and financial performance as a result of the firm’s swift response to the problem.

That was the view of various industry analysts speaking to Mobile News after the Korean firm’s device was pulled just 24 hours before it was due to go on sale in the UK on September 2.

Samsung, the world’s biggest smartphone manufacturer was responding to 35 separate reports worldwide of severe overheating and in some instances catching fire. The device had been on sale in countries such as the US since August 16, with more than a million sold. Last week it was reported that a customer’s Jeep caught fire after leaving his Note7 on charge in the vehicle.

Up in smoke
The manufacturer, which blamed a “battery cell issue” for the problem, immediately suspended all sales and issued a product recall (Product Exchange Programme) for those already sold/dispatched.  All customers were contacted either direct or through reseller partners.

Fears Extinguished
However, despite the ugly headlines, analysts expect no lasting damage to its reputation.
“It will be forgotten about in three months,” said IDC European mobile devices research director Francisco Jeronimo.

“This has happened in the past and nobody stops buying from a manufacturer because of a few exploding devices.”

“Samsung has dealt with it as best as they could. If they weren’t so quick in notifying customers and offering to replace the devices, then the impact might have been different.”

Canalys senior analyst Tim Coulling added: “They’ve done everything that’s expected of them and have gone over and above what other companies would have done in similar scenarios.”

Apple battle heats up

News of the Note7 broke just days before Apple unveiled its latest iPhone (see page 20).
GFK key account director Imran Choudhary claimed the issue will have worked in Apple’s favour.

“The Note7 was launched and announced in August, giving it some lead time advantage over the iPhone 7. The recall will have impacted this, removing most of the early launch advantage for Samsung.”

Ovum practice leader Steven Hartley disagreed: “I don’t think it comes at a bad time. The Note7 is a very specific product and targets a more niche segment that aren’t covered by the more popular iPhone or Galaxy S7 handsets. It won’t hurt them in the long term.”

Replacements were due to be sent out today (September 19).