The Note 7 recall has been a shambles from the word go. The news is everywhere after one or two phones went up in flames, followed by images emerging of one burnt out on a plane. What started out as a Note 7 recall has ended with the complete discontinuation of the handset and probably the whole Note series altogether.
Unfortunately for Samsung, the Note has been irreparably damaged in terms of brand – up in flames so to speak. To design the Note 7 replacement and sell it under the Note branding would be a terrible shout.
After investigating the issue, Samsung concluded that the batteries were slightly too big for the Note 7. The batteries became crimped in the device, overheated and short-circuited.
The original cost of the Note 7 recall was in the region of 1.8 billion dollars. The cost of an entire recall and discontinuing the phone is an eye-watering 17 billion dollars. For a company like Samsung, who make laptops fridges, ovens, smart accessories, TV’s and tanks (as in army tanks) 17 billion is a drop in the ocean, but they did cut their revenue forecasts for the third quarter by 33% following the recall.
That’s the obvious cost, but the repair work costs money too – and that’s just the brand. Samsung are now offering financial incentives to customers, encouraging them to stay with the South Korean phone manufacturer. In the US, they are offering to pay $100 off your phone bill if you return your Note 7 and switch to another Samsung phone. In South Korea they are offering just under the equivalent of $65. Samsung are effectively paying their customers to stay with them. Meanwhile, they have also quickly distanced their flagship phone, the Galaxy S7, from thoughts that a similar problem could occur.
Following the Note 7 recall, Samsung are looking to move the launch of the Galaxy S8 forward to February 2017.
This is a nightmarish time for Samsung. Apple just released their new iPhone 7 and 7 Plus. It seems to be going smoothly for them with no issues popping up. Also, Google announced their new Pixel and Pixel XL. And to top it all off, Christmas is right around the corner and Samsung’s name will be more than a little blemished for the next few months. Or at least until they release their next flagship in early 2017.
