Month: October 2016

Launched in August 2016, the Galaxy 7 Note is the most expensive phone ever released by Samsung. In recent weeks, a significant number of consumers reported that their devices had burst into flames, prompting Samsung to issue a global recall of the 1 million sold units that it had sold so far.

The cause of the damage is relatively common.  Most portable, rechargeable devices such as smart phones, tablets, laptops and even Tesla cars are powered by lithium-ion batteries. Faults occur when the batteries are charged too quickly or by tiny manufacturing errors, causing a short-circuit which can lead to fire.

This isn’t the first time that a consumer electronics giant has had to issue a global recall due to battery failure. In 2006, Sony, the pioneer of lithium-ion battery technology (they rolled out the first commercially available version in 1991) had to recall over 4 million batteries which were used to power Dell, Apple and Lenovo laptops. The short-term cost of the short circuiting batteries was reported by Sony to its shareholders in 2006 to be $432m.

However, the dent on Sony’s previously untarnished reputation for manufacturing excellence coincided with consecutive, heavy, year-on-year operating losses from its battery division, culminating into a $600m write-off and the eventual sale of the business unit to Apple battery supplier Murata. 

Samsung’s smoke signals

Samsung have acted swiftly to try to save the Galaxy 7 Note, but their hastiness in doing so may have inadvertently sealed the phones fate.  Customers have reported that the same problem is still occurring with the supposedly upgraded replacement models.  The defect has clearly yet to be resolved, and the situation is turning into a PR disaster for Samsung. This week, the South Korean Government launched an official investigation to get to the bottom of the issue.

Industry analysts say investigating why the Note 7 devices caught fire, with more than 100 incidents in the United States alone and costing Samsung $5.3 billion from its operating profit over the next two quarters, is crucial for the world’s largest smart phone maker.

What can they do to save their reputation?

1: Understand the problem

It may seem obvious, but getting to the root of the issue is essential to rebuild the trust in Samsung as a technology innovator. They must ensure that all future smart phone product lines don’t have the same issue as the Galaxy Note 7.

2: Be transparent

The results of the Government investigation should be shared with the public including detailing what went wrong, how they will fix it and what they will do to prevent it from happening again. Mistakes happen, consumers can be forgiving if they are assured that the brand is being honest and up-front with them.

3: Be decisive

Considering Sony’s losses following its battery woes and the recent entry of Google into the premium smart phone market, the right move might be to completely mothball the Galaxy 7 Note.  This would take the ailing product out of the firing line, preventing further embarrassing headlines and draw a line under the fiasco.

4: Remind the market of your success

The Galaxy 7 Note might be a rotten apple, but the rest of the barrel aren’t. Samsung has the largest share of the global smartphone market, which is no small part due to the reliability and build quality of their products. They should make efforts to remind customers of their proven track-record with smartphones. And to further illustrate their credentials, should educate consumers about the reliability of their diverse range of consumer electronic products.

What do you think Samsung should do next about the Galaxy 7 Note?

Is the Galaxy Note series doomed now?

Do you think Samsung’s reputation will be seriously damaged by the Galaxy 7 Note fiasco?

Let us know by leaving a comment in the box below: