In August, as evidence mounted that Samsung’s Galaxy Note 7 had a battery-related problem, the major US carriers all announced plans to offer customers trade-ins, store credit, and replacement devices. These kinds of campaigns are never inexpensive. Carriers have to push out notifications to all of their employees, and develop plans to address the various customer issues that occur as a result. Earlier this week, we covered a replaced Galaxy Note 7 that ignited without warning on an aircraft flying from Louisville to Baltimore. Yet it seems the various wireless companies have had enough — every major carrier has now made comments indicating they will replace devices with alternate products if customers no longer want a Note 7 at all.
The US Consumer Product Safety has already opened an inquiry into the fire and Samsung is working with the organization. But at this point the Note 7 has been piling up negative publicity for well over a month. The device has already been through one recall, and while we gave Samsung credit for moving quickly and decisively, that’s going to evaporate if the company missed something and is forced into a second recall. Customers are willing to tolerate a mistake in a device, but two battery-related recalls in the same product? That’s the kind of issue that could follow the company’s future products. In a worst-case scenario, it could kill the entire Note brand.
The above might sound like an exaggeration, but it isn’t. IBM once commanded a significant amount of the hard drive market thanks to its well-regarded Deskstar family. When the 75 GXP series first launched, it was widely acclaimed and recommended. When drives started dying, IBM refused to acknowledge or address the problem, saying only that it would replace any drive that failed within warranty. Once it became clear that even the warrantied drives could fail in significant quantities, consumer trust in the brand plummeted. With no way to determine what the precise problem was with the 75 GXP and no information from IBM, reviewers pulled their recommendations for the entire Deskstar family and steered readers towards products from Western Digital, Samsung, Hitachi, and Seagate.
Samsung could find itself in a similar position with its phones if it doesn’t get the problem under control. If this failure is just a one-off, the Galaxy Note 7 will recover. If the Galaxy Note 7 turns out to have a second major problem, it’s time to recall the hardware and pulp the device. That may sting division sales in the short-term, but Samsung is a well-off company and can afford to take the hit. What it can’t afford is for its devices to acquire a reputation for shoddy workmanship and poor quality control. Pulling the Note 7 may sting, but being forced to kill the Note brand due to negative consumer perception when it was Samsung that popularized “phablet” devices in the first place will sting much worse. With Google’s Pixel and Pixel XL having just launched, Samsung can’t afford for its own large-screen flagship to be painted as an exploding disaster as a new competitor enters the market.