Take Note: the cautionary tale of Samsung’s turbulent 2016

Ladies and gentlemen, welcome on board this Ryanair flight FR2674 to Copenhagen […] Passengers travelling with a Samsung Note 7 device are instructed to turn off their device for the duration of the flight; if the device is stored in hold luggage passengers are advised to make themselves known immediately to the cabin crew.”

2016 was a mixed bag for Samsung. Coming off the success of their Galaxy S7, everything appeared to be rosy for the Korean technology giant. It seemed pretty clear that their next phone, the Note 7, would bring untold fortunes to the company. And, for a short time, it did. Critics and consumers alike could not get enough of the Note 7. In the first few weeks, it sold like hotcakes and made it seem as though Samsung had finally beaten Apple to the punch in creating the flagship of 2016.

Then things started to go badly. By the end of August, there had already been a number of reports that Note 7s were catching fire spontaneously, much to the chagrin of their owners. In response, Samsung issued a recall of devices in certain regions and offered affected users a replacement phone in exchange. And that was it. No more problems. Well, that was until the replacement phones started catching fire, one instance of which forced the evacuation of a Southwest Airlines flight.

Evidently, this was not ideal. However, Samsung was not particularly quick in responding to the situation. It took them until 10 October to issue a worldwide recall, by which time there had been over 100 reports of Note 7s going up in smoke, and the company had seen almost £11 billion pounds wiped from its market value. In January 2017, Samsung put the final nail in the Note 7’s coffin and issued an update which prevented devices from being charged above 15 per cent, effectively ‘bricking’ the phone.

So what does this mean for Samsung now that they’ve lost the smartphone arms race in such spectacular fashion? Well, to be honest, reports of their ‘death’ have been greatly exaggerated.

Whilst the loss of the Note 7 was a significant hit for the technology giant, by the end of 2016 Samsung were still the world’s largest phone manufacturer and actually saw a slight increase in their market share from Q1. We have to remember that Samsung is more than the Note 7; they make a plethora of other devices and components, many of which find their way into competitors’ smartphones. And although the Note’s failure did force the company to sell off around £683 million worth of shares in some of its subsidiaries, it did not come anywhere close to triggering a complete collapse.

What is probably more irreparable is Samsung’s reputation – at least in the short term. New device announcements will almost certainly be marred by speculation about whether this phone is going to explode, mainly because it gives media outlets an opportunity to rehash four month-old click-bait articles based on a product which has already been recalled (just like we are doing here). The sooner Samsung can dispel those types of stories, the better. Even the least technologically savvy consumer will think twice about buying a device from a company which has been in the news for making their first new phone since ‘the one which blew up’. Samsung will need to be batting 10^10 with their next device, otherwise, they may well find themselves out of the frying pan and into the fire.

Image: Photomans / Shutterstock, Inc.

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