Battery. This simple word best describes the situation that Samsung is in at the moment. What happened? Dozens of Galaxy Note 7 models caught fire and exploded recently. The reason – overheated batteries. The latest news – in Brooklyn, NY, a boy (6) has been taken to the hospital during the weekend in order to receive the treatment of the burns he got when his phone exploded in his hands. Guess the phone model – Samsung Galaxy Note 7.
“He doesn’t want to see or go near any phones”, said his grandmother. This news made Samsung’s situation become viral.
Not so many appliances have had this kind of a bad start so far.
Samsung Galaxy Note 7 is a flagship model. Its retail price is $850. As described officially, it is a “powerful instrument for achievement and self-expression and is made for those who want to get the most from their phones”. Now, Samsung already launched a recall for 2.5 million Galaxy Note 7 units to be brought back voluntarily. As a matter of fact, the FAA (Federal Aviation Administration) in the United States of America made an announcement asking people who were about to fly not to turn on or charge phones on flights. The FAA also warned fliers not to store the gadgets in checked luggage.
Even worse, Samsung asked all smartphone (Note 7) owners to shut off and even return their phones for the new device. They said everything would be done by September 30.
Furthermore, we have received a statement: “In response to our recent announcement regarding battery cell issues with the Galaxy Note7, we are advising that you power down your Note7 and exchange it now, as part of our U.S. Product Exchange Program for all Galaxy Note7 owners. We strongly advise all customers to use this exchange program because your safety is our top priority. Additional sales and shipments of the affected devices have been stopped, but if you already have a Galaxy Note7, we strongly advise that you replace it.”
As a motive, all the users swapping their Galaxy Note 7 model will receive a $25 gift that can be spent two ways – in-store or as a credit facing their bill.
At the same time – Apple is planning on locking the preorders for their newest models – iPhone 7 and iPhone 7 Plus. As for the value of the company, Samsung Electronics shares fell by approximately 7 percent. Also, $14.3 billion has been wiped off the company’s market capitalization.
Now with the whole situation going on, Samsung users might want to switch to Apple, especially after the cognition that they could be left without their gadgets for some time. There were some unwanted effects for Apple regarding the headphone jack situation and the possibility of losing AirPods. But after the news with the 6-year-old having Samsung explode in his hands, the situation with the new iPhone sounds like not a big deal.
The whole thing will definitely damage the Samsung’s goal of attracting high-end media and brand partnerships.
“While I don’t imagine this will stop brands and agencies from developing for Android, as it reaches far beyond Samsung hardware, I do see this creating some challenges for Samsung from a partnership perspective,” he said. “As we’re seeing across hardware, software and media brands, exclusive sponsored content and experiences are becoming more and more a part of the toolkit in attracting and retaining users. Losing those valuable partnerships could be an added blow beyond a hit to the stock price.” Stated Stephen Beck, founder, and CEO of Engine Digital.
On the other hand, Andrew Howlett (CDO at Rain) thinks the recall is not going to impact what consumers think of the Samsung. He explained that the users of Samsung will see this as a hardware issue. Being it, they are not going to associate it with the software or experiential side of the product.
Ben Hordell, the founding partner of DXagency, advised marketers on how the smartphones should be talked about in the next months. He cautioned them not to use phrases like “hot” or “on fire” for their new phones. “It may sound silly, but the issue is serious. And when in crisis, brands must choose their words carefully”, Hordell concluded.