The Fall is not often an interesting time when it comes to technology news and releases. Of course, we have the upcoming launch of the new Nexus phones – sorry, Pixel phones – and we’re sure to see some more smartwatches and other wearables hit the market soon, too. Other than that however, it’s not usually an exciting time to be a technology fan, and even less exciting to be a mobile fan. Of course, for many there are two big smartphone releases that often put all of this doubt to the back of their minds; the Galaxy Note and Nexus line of devices. While the latter has yet to appear, the former has hit shelves and flown off of them, perhaps too quickly, given the reports of exploding batteries that has led to an unprecedented global recall for Samsung.
It's difficult to understand just how big of a deal this is for Samsung, aside from just the money side of things, and that’s because we’re still in it right now. This is a recall that’s still going, and, as of the time of writing, Samsung appears to be struggling to even get people to bring their phones in at all. If we do take a look at the monetary side of things, Samsung has lost $26 Billion in market value in one weekend alone. That’s incredible. It’s so unusual for a company to lose quite so much market value in such a short space of time, even more so during a period where they’re supposed to be making money, not losing it. Ever since Samsung acknowledged that there was a problem with the Galaxy Note 7, it was always going to end up costing them, but it’s unlikely anyone thought that it would cost them quite as much as it already has. While we’ve covered the recall in detail once before, it’s best we start with a more complete and up-to-date reason why Samsung has had to recall one of their most successful releases of the past few years.
We all know what the headlining issue here is; Galaxy Note 7 smartphones are exploding. Perhaps not in all cases, but the main problem here with the battery inside of the Galaxy Note 7. Many thought that the use of a USB Type-C connector for the first time was to blame for such issues, but it turns out that it was in fact Samsung’s own batteries that were at fault. According to a number of reports, Samsung is to no longer use batteries from their own Samsung SDI firm, and will instead rely on third-parties exclusively to provide batteries for all Galaxy Note 7 orders going forward. Regardless of who or what we do or don’t believe, the battery is definitely the issue here. In a statement from Samsung themselves they say that “an overheating of the battery cell occurred when the anode-to-cathode came into contact”. So, that’s that then, the Galaxy Note 7 is exploding due to bad batteries. In its simplest form then, all Samsung need to do is swap all of the existing Galaxy Note 7 devices – those with Samsung SDI batteries at least – for devices that are safe, right? That’s exactly what they need to do, but for Samsung, this whole situation could go a lot further than just one botched device launch, and could spell bad news for 2017 and even further to come.
Samsung, whether you like the company or not, has become a trusted brand the world over. Back in March, the South Korean name was crowned the third most valuable brand in the world – that’s most valuable brand, not company – and they were also crowned India’s most trusted brand for 2016 as well. The firm honors awards like this all over the world, they’re a huge presence during the Olympic Games every four years, they’re a massive name in the TV market and there’s a very, very good chance that every one of you reading this has something from Samsung in their home or workplace. The size of Samsung cannot be understated, and the damage that something like this can do to a brand is massive.
Just as there are users that – some wrongly refer to as “sheep” – buy an iPhone each and every year, or whenever their contract is up, there are customers that will only buy Samsung each and every year. This sort of product recall, that is quite obviously dangerous, and now has unfortunate reports next to it such as injuring children as well as property, could do much more damage for Samsung than just lose them $20 Billion or so. Similarly, to that one petty argument you have with “that one friend” over and over, it is the principal of the matter here that could cost Samsung dearly. “If Samsung can’t make one of their biggest product launches safe to use, then what about the rest of their products?” That’s the question that a lot of people will be asking themselves as of late, and given that the smartphone market isn't far from excellent choices outside of Apple and Samsung, the South Korean giant certainly has a lot to worry about. There will be countless customers that will simply swear off from Samsung in the future, and when a lot of these users are on two-year contracts, that’s a big deal. The immediate danger for Samsung, is of course, the Galaxy S8. Poised to be announced and launched next Spring, will it be marred by question marks and doubts on whether or not Samsung can continue to sell a quality product?
I was never one to stick with one brand, I started off in Android with an HTC Desire, moved to a Nexus S, then back to HTC, then to Sony, then to Motorola, then to OnePlus and now I have a Galaxy S7 Edge. I love my Galaxy S7 Edge. It looks great, the software is not too “look at me, I’m a Samsung phone!” and it sounds fantastic as well. It ticks all of the right boxes for me, and while I’m lucky that the Galaxy S7 Edge has not been subject to a product recall, if it were, I would simply go elsewhere. Sure, the design of the Galaxy S7 Edge is one that I absolutely love, but if Samsung couldn’t deliver the product I wanted, then I would just go for the LG G5, or perhaps the cool new Moto Z. The point here is that the game has changed, there are plenty of other players playing at a similar level to Samsung, and loyal customers either need more of a pull from their competitors or a big push from Samsung themselves. With the Galaxy Note 7’s failure to deliver right out of the gate, Samsung has just given millions of users that big push.
We’re seeing something similar right now with the launch of the iPhone 7 and iPhone 7 Plus, the removal of the headphone jack – which is arguably too early, but also inevitable – has alienated a great number of customers. However, in Apple’s case they haven’t gotten anything wrong, they’ve just done something people don’t like right now, the Apple brand is still strong and there’s no danger to purchasing one of these new phones. Loyal Apple fans will get over having to adapt to yet another dongle and charging their earphones, but Samsung loyalists will no doubt have to think twice when purchasing their next Samsung smartphone, and there’s plenty of other options just waiting for them. All of which are easy as logging in with the same Google account to switch to.
This is the sort of news that makes national newspapers. Here in the UK I have had family members who think my job is something out of the Jetsons genuinely ask me what’s the deal with these exploding phones. This very rarely happens to me, there’s little in the technology world that my friends or family really care about, but the first thing many of them say to me when I see them now, is what’s going on with the Galaxy Note 7. They say that there’s no such thing as bad publicity, but in Samsung’s case this old proverb doesn’t ring true. The Galaxy Note 7 was supposed to be the way that Samsung tops off a pretty great year for them, and have instead ended up – not purposefully, of course – releasing a device that has done them more harm than it has good.
We’re not talking about a device that’s going to be on sale for just the next few months, either. This is a flagship smartphone from Samsung, and one that carriers and networks all over the world would like to keep on selling throughout 2017. While Samsung is certain to fix this issue and get these devices back on sale before the end of 2016, there’s little to no way that the Galaxy Note 7 is going to sell as well as it would have done in 2017 if this recall hadn’t happened. This is just one of the ways that Samsung will no doubt suffer in the long term at the hands of this global recall, and sales of this particular device are just one part of the fallout that will be happening as a result of this.
Who wants to purchase a device from a brand that has recent history of selling a device that spontaneously catches fire? I don’t know of many people that would, and even though this problem is one that will be fixed and one that Samsung is unlikely to repeat, the damage will no doubt already have been done. Samsung’s armor has a chink in it, a permanent one, which might well be repaired by the return of the Galaxy Note 7 to store shelves, but one that will haunt Samsung’s brand for the next year to come.
Samsung has little choice but keep on chugging with the Galaxy Note 7, which is perhaps more depressing than anything else. They are not in a position to simply abandon the Galaxy Note line, even if for one year, and the leapfrogging they did of Apple and the iPhone 7 announcement now counts for nothing. The Galaxy Note 7 will go down in history, perhaps as “that phone Samsung made that used to catch fire”, but no matter what this is something much bigger than just a phone that didn’t work out for Samsung, it will no doubt make 2017 difficult for the firm, and just maybe, make it easier for the other big players to take some market share from Samsung.