Samsung are usually a very trustworthy company and there are never normally any safety concerns. However, it is unfortunate for them that their most recent phone the Galaxy Note 7 has been causing severe problems for them. If you haven’t been keeping up to date with the latest news, then you would not have heard that they have been exploding and catching fire spontaneously. This issue has led widespread criticism, but what was worse was the replacement Note 7’s that were sent out by Samsung, continued in the same vain.
Samsung made the decision to recall every phone and immediately cease production. It has been reported that Samsung are set to lose the $17 billion expected revenue. But what happened and what next for Samsung?
The Problem and Other Products
The issue still hasn’t been pinpointed and originally they thought that it was down to faulty batteries, supplied by its subsidiary Samsung SDI. However, when they replaced them with batteries from a different supplier, ADL, but the problem still occurred. Initially they thought the problem was, the plates inside the battery were too close to each other near its rounded corners. This would have made it vulnerable to short circuiting, plus the battery also had defects in its insulating tape and the coating of its negative electrode. Then afterwards the replacements started suffering from the same defect, it was noted that other defects could exist within the Note 7. Unfortunately, Samsung engineers have been unable to reproduce the explosion, leaving them unable to pinpoint the problem as of yet.
The wider issue is consumers could question the safety of other Samsung products, and perhaps rightly so? Either way, without being able to pinpoint where the problem lies, they are unable to say for certain whether other products could suffer the same defect. However, whilst there have been isolated incidents with the Galaxy S7 and Edge 7, the company hasn’t acknowledged that there is a broader issue. It is highly likely that in Samsung’s attempts to create their most powerful phone, it was too powerful and the battery couldn’t take the strain. Will this very public fiasco taint the Samsung name?
What Does This Mean for Samsung?
Largely, it will probably mean not all that much as Samsung will have their fans and those who buy their products religiously. It may be a concern for those who have never bought, or only recently decided to convert to the Samsung brand (particularly those whose first Samsung was the Note 7). Whilst they have announced that they are expected a loss of $1.9 billion in the third quarter, the damage done will be more to the brand name. They will have to work on recreating consumer trust before their next high end release, The Galaxy S8.
The company will have to emphasize quality and prove to consumers that they can be trusted again. They will need to prove that they have conducted rigorous safety tests and checks on any new products. They will probably try and rebuild that trust and confidence by offering deals on other Samsung phones such as the Galaxy S7. Expect to see substantial discounts and other promotions on Samsung products, especially in the lead up to Christmas.
A Boom in the Market
Apple are benefiting from the misfortune of Samsung, their share price hit a 10-month high after Samsung announced that they would discontinue the Note 7. Other smartphone makers will have to make the most of the PR disaster and in the UK the likes of Sony, Huawei, LG and HTC will look to benefit from it. This also couldn’t have happened at a better time for Google, with the imminent arrival of their debut smartphones the Pixel and Pixel XL.
This will be a lesson Samsung and they will now have to work hard to find the problem so that it doesn’t happen again. They will also need to rebuild trust they have gained over the years, but by no means will this be their demise. Although, this will almost certainly be the cremation service for the Note 7 though, which has now affectionately become known as the ‘death note’.