What now for Samsung after Note fiasco?
Customer confidence must be restored after Note 7nightmare
The fiasco of Samsung’s fire-prone Galaxy Note 7 smartphones – and the firm’s stumbling response to the problem – has left consumers from Shanghai to New York reconsidering how they feel about the South Korean tech giant and its products.
Samsung said on Tuesday it would stop making the Note 7 for good, after first recalling some devices and then recalling their replacements, too. Now it must try to restore its relationship with customers as it repairs the damage to its brand.
“I’m in a state of ‘I don’t know’,” said Pamela Gill, a 51-year-old who works at Pratt Institute, a college in New York City, and likes her replacement Note 7. “You’re thinking, do I have to turn it in? Is it going to blow up?”
“A company’s brand is its promise to consumers,” said John Jacobs, an expert on reputation and crisis communications at Georgetown University. “If you break that promise, you lose the customers, you lose their loyalty.”
Initially, the Note 7 got glowing reviews for its size, features and big battery capacity. Now the company is struggling to figure out what exactly is wrong.
Samsung needs to win back consumers’ trust by the time it launches its next high-end phone, the Galaxy S8, likely in late winter or early spring. Kim Young Woo, a tech analyst, believes Samsung could accelerate the launch of the S8 to make up for abandoning the Note 7, but it cannot afford to start from scratch, and it has to find the cause of the overheating. The Note 7 has cutting-edge features like an electronic stylus and an iris-scanning security feature.
“Samsung’s best, latest technologies are all in the Note 7,” said one user. “If it releases the next phone, it has to use the technologies in the Note 7.”
CAN SAMSUNG COME BACK?
Samsung is the world’s leading smartphone maker, selling more than 77 million phones in the second quarter of 2016. But in the US market, it lags behind Apple, whose iPhone models are more popular, according to International Data Corp.
While Samsung has suffered a “big setback”, IDC analyst Ryan Reith said, “my guess is it won’t do a lot of damage” to its overall share of the market. But he warned Samsung’s profits may suffer because it will need to offer substantial discounts and other promotions to boost sales.
Reputation expert Jacobs says Samsung will need to do more than that. He said the firm made the right decision to cancel the Note 7 “for the greater good of the Samsung brand”. But he believes Samsung should emphasise quality and rigorous testing when it promotes future models.
“They want to be known, two years from now, as a company that can be trusted,” he said. When potential customers contemplate future Samsung products, he said, “you don’t want them having that worry in the back of their mind”.