As many smartphone enthusiasts are aware, earlier this week Samsung officially canceled the Galaxy Note 7 after failing to fix the issues causing its battery to catch on fire, and the company urged customers to replace their faulty devices with a different model or to ask for a full refund. Needless to say, Samsung is now in full damage control mode, working diligently to avoid hurting its reputation further, and is now reportedly offering incentives to Samsung Galaxy Note 7 owners in South Korea.
The smartphone business is highly competitive, with numerous manufacturers fighting over market share every other quarter. A faulty smartphone leading to fires, burns, property damage and so on, can only hurt a company's reputation and Samsung is well aware of this fact, which is why the South Korean tech giant has decided to cancel the Galaxy Note 7 in the first place, and why it has been working around the clock in order to avoid more damage to its name. As per a report from rating agency Fitch "Industry experience, such as the decline of Nokia and BlackBerry, shows how successful manufacturers can lose market share particularly quickly in the handset business". And according to a report from Reuters, Samsung Electronics is now offering monetary incentives to Galaxy Note 7 owners in South Korea returning their devices in order to mitigate some of the damage to its reputation. Customers who choose to apply for a full refund in South Korea have been offered a coupon worth 30,000 Won (roughly $26), while customers who have decided to exchange the Galaxy Note 7 for another high-end Samsung device have been rewarded with an additional 70,000 Won (~$61) mobile credit for their "big inconvenience".
In the meantime, Samsung Electronics has recalculated its quarterly profit estimates and slashed them by $2.3 billion in order to reflect the damage done by the Galaxy Note 7's cancellation, but only time will tell if these unfortunate events will have a long-term effect on the company's reputation. According to Fitch, "potential long-term brand damage is a greater threat to its credit profile than the direct financial impact, which will be buffered by ample liquidity and a strong balance sheet". In any case, it's worth noting that many Samsung Galaxy Note 7 owners opted for a different Samsung flagship model as a replacement as opposed to asking for a full refund, which should indicate that many Samsung customers have remained loyal to the brand in spite of recent happenings.