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Samsung Geeks | December 7, 2016

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Exploding Note 7: The Real Cost for Samsung - Samsung Geeks

Exploding Note 7: The Real Cost for Samsung

| On 03, Nov 2016

 

What a terrible few months it’s been for Samsung. Back in August, the Samsung Unpacked Conference was hosted in New York, in satellite collaboration with audiences in London and Rio, and put on a visual spectacle that was nothing short of what we had come to expect from Samsung.

Eager to show off their latest inventions, audiences were given VR headsets and fantastic sound and light shows. It all looked so promising, and Samsung fans everywhere were hyped up about the release of the new phablet, the Note 7.

Now, as even those who live under rocks surely know, the Note 7 has become one of the most memorable mass malfunctions in recent times. So what has the real cost for Samsung been, and can they recover from the exploding Note 7s?

Promises, Promises

The Note 7 was said to be the ‘world’s most intelligent smartphone’, and built up huge excitement with promises of amazing new features. With its back-on-the-block and better than ever S Pen stylus, 5.7” Super AMOLED high dynamic range display, USB Type-C charging and data transfer, and of course, the highly anticipated iris scanning security technology, it looked as though it would deliver on its promise of being the best and smartest smartphone around.

So pre-orders had been submitted in their millions, and the release was all set to blow minds and steal the majority customer base from Apple. But then, just before the end of August, some pretty unexpected things started happening…

The Burning Truth

Just days after the very first pre-ordered handsets had been dispatched to those who paid vast sums for the privilege, a strange story broke. Apparently, the Note 7s were catching fire and/or exploding while on charge. Thankfully, there weren’t any terrible accidents or house fires, but owners were being startled by clouds of smoke and the like. It’s definitely not what you expect to find in place of your £600 phablet. Although the internet was flooded with humorous memes and videos, seeing the funny side of the fiasco, those at the top whose name was on the case, weren’t so amused.

Samsung were quick to respond, saying that they were suspending further sales and distribution and investigating. The issue was blamed on a “battery cell issue”, and an official exchange programme was initiated, with different instructions for users around the world as to how to safely dispose of spontaneously-combustible phones.

The Aftermath

When the first exploding Note 7 stories started emerging, the phone hadn’t gone on proper general release yet. Buyers in Korea had theirs, and the US and UK pre-orderers were just receiving their early bird specials. But by this point, several million handsets were already out there, waiting to blow up on unsuspecting customers. At first, Samsung hoped they could salvage the situation, and collect what they said was a faulty batch of batteries, simply replacing them with functioning phones. A recall was issued and retailers and customers everywhere were scrambling to get their hazardous handsets back to the store.

While some issuers offered refunds, exchanges and other forms of compensation, some were given the option of trading a dangerous Note 7 from the dodgy batch with a good one. But all hope of redemption went up in flames when even the replacement handsets started experiencing the very same problems. Samsung was forced to hang its head and wander back to the drawing board. A second recall was issued, the Note 7 was declared ‘discontinued’, and the world’s most intelligent smartphone was dead in the water.

What’s the Real Cost for Samsung?

Back in May of 2016, Samsung were valued at $161.6 billion. At present, this is estimated to have toppled by a massive 30%. They were also ranked, back in May, as higher-valued than Microsoft. Samsung have built a loyal and appreciative following over the years, mainly thanks to their focus on customer experience and quality, and have always designed their products to cater to the needs of the user. This is what makes whatever caused this particular incident such a massive blow to their empire, and of course their reputation in the market from hereon in.

Continued strength in long-running rivalry with Apple kept Samsung on top of the phone market, but this incident could well be the last straw that drags Samsung down. Several companies have brought lawsuits against Samsung for their apparently poor handling of the recall process, and some customers previously loyal to Samsung commenting online have declared their distrust of the company now, in light of the Note 7 incident. For a company that really was on top of the world, having dominated pretty much every consumer electronic market there is, this really is a devastating turn of events.

Where to from Here?

Although the company worth has taken a blow, as has its reputation and customer base, the end of the Note 7 is by no means the end of Samsung. New designs like the Galaxy X and the S8 are in the works, and are not expected to catch fire, come to life, or do anything else untoward. And of course, Samsung still have their televisions, refrigerators, hobs and audio systems to fall back on, in the unlikely event of their phones division collapsing.

But the Note 7 shenanigans will have come at a cost: it is down to personal taste and outlook as to how many previous Samsung customers will stick with the brand. A poll recently conducted by CNET suggests that almost half of customers are looking to turn to Apple, rather than give Samsung any more chances to get things right.

Stick around here at Samsung Geeks for all the latest on the Note 7 situation, and all the latest goings-on from Samsung.