A Major Setback for Samsung

October 12, 2016

Samsung decided to bench the Galaxy Note 7 this week rather than risk a potential strike three with consumers. 

As airline travelers know all too well, the Samsung smart phones that were provided to replace the original Galaxy Note 7 have demonstrated the same disturbing penchant for self-ignition. The constant repetition of pre-flight warnings regarding Samsung phones—in airport terminals and onboard aircraft—heralded a severe brand nosedive. Travelers were hearing ticket agents and flight attendants assault the Samsung brand tens of thousands of times each day in airports around the world. 

Samsung did release another version of the Galaxy Note 7 with a new battery and software update, but it ended up having the same safety-oriented defect. I wasn’t in the situation room, but one can only surmise that the urgency to deliver product and preserve market share prevailed over the safety imperative. There’s speculation that Samsung’s rush to market in advance of Apple’s iPhone 7 may have contributed to the problem.

Some analysts predict that the cost of the Galaxy Note 7 debacle could reach $10 billion. A larger issue: What’s the long-term cost to the Samsung brand?

UPDATE (10/12/16 evening): Samsung is now sending customers "thermally-insulated" return kits for those who would like to send back a faulty smartpone. The kit also includes safety gloves and assembly instructions. 

Samsung discontinuing the Note 7 may have saved them from a third strike with customers.

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Samsung's debacle could cost up to $10 billion. Can they recover?

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