What now for Sam­sung after Note fi­asco?

Cus­tomer con­fi­dence must be re­stored after Note 7night­mare

7 Days in Dubai - - FRONT PAGE -

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?”

MYS­TERY DE­FECTS

“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.

BREATH­ING ROOM

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”.

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