When Samsung released the Galaxy Note 7 last month, it was hailed as the best Android phone out there. According to DisplayMate, the Note 7 has the world’s best display ever. The phablet was doing brisk business until reports of battery explosions started surfacing online. Though there were only 35 or so instances of battery explosions while charging, Samsung chose to recall all the 2.5 million Galaxy Note 7 units sold worldwide and replace them with a new one.
Samsung has been quick & transparent, but…
Samsung acted in as quick and transparent manner as possible. Though less than 0.1% of the Galaxy Note 7 units were packed with faulty batteries, the company is replacing all the phones it has shipped so far in an attempt to retain the consumer confidence. The mass recall would cost Samsung as much as $1 billion. The fiasco would also affect the future sales of the Note 7.
The Korean electronics giant’s transparent handling of the situation would help contain the long-term damage to its brand image. However, it will be extremely difficult to convince consumers that the Note 7 has put the past behind it. Samsung has said that it would stop sourcing batteries from Samsung SDI, which was responsible for the faulty batteries.
Galaxy Note 7 seems to have lost its advantages
Analysts were previously expecting Samsung to ship as many as 14 million units of the Note 7 by the end of this year. Now that estimate has been slashed to 10 million units. According to the Financial Times, these 4 million units would cost Samsung roughly $4 billion in revenue. The Galaxy Note 7 battery fiasco could not have come at a worse time. Apple is all set to announce the iPhone 7 and 7 Plus on September 7.
If the iPhone 7 Plus with dual-camera, more RAM, and a better processor turns out to be as good as rumors suggest, Apple might be able to attract some potential Galaxy Note 7 buyers to its new iPhones. The hardcore Note fans who love the stylus are unlikely to switch to the iPhone 7 Plus. But one thing is clear: the Galaxy Note 7 has lost its advantages.