With the news that the new Galaxy Note 7 is being discontinued due to even more explosions in the newer models, this is already a bad week for Samsung. To many, the Note series phones are the top of the line Samsung phones, and it’s release is widely anticipated each year by millions of people worldwide. Yet Samsung cannot take the risk of more people having their phones explode on them. Neither can airlines afford to have people fly with these phones. Needless to say, this will cost Samsung billions of dollars in lost revenue and lost profits. Why is the timing of this even worse for Samsung? What can Samsung do to fix this issue and make loyal customers happy?
Many customers around the world use GSM phones. When unlocked, these phones can be used on most carriers around the world. While Samsung faces direct competition from Apple for the highest selling smartphone each year, there is growing competition from other companies that sell factory unlocked GSM phones. Companies like Motorola and OnePlus sell phones that have similar specs at hundreds of dollars less than what Samsung and Apple sell their phones for.
For instance, an unlocked Samsung Galaxy S7 with 32 gigs of built in storage cost around $670. The OnePlus 3, which is unlocked, but does not expand past the built in 64 gigs of built in storage, is $400. Last years OnePlus 2, also unlocked with 64 gigs of storage, cost $300. So for $30 more than the cost of the unlocked Galaxy S7, I can buy the unlocked OnePlus 2 and OnePlus 3. Combine this with the upcoming holiday season, and it’s a horrible combination for Samsung to deal with. If other phone makers were smart, they would offer discounts on their phones to capitalize on holiday shoppers who have lost confidence in Samsung.
What Can Samsung Do?
At this point, Samsung can do nothing until it figures out what caused the battery problems and fix it. If this issue happens again with another phone, it will mean even more doom for Samsung. Combine this with the fact that Apple has historically used some Samsung parts in the iPhone, which is strange considering how much time they spend in court against each other, they could lose any deals they have with Apple that brings them money.
While Samsung’s focus would normally be on marketing and selling the Note phone, they also have to put the finishing touches on the Galaxy S8 phone as well. The latest Galaxy S series phone comes out in late winter/early spring for the Northern Hemisphere. However, Samsung may want to consider moving up the release date of this phone, if it can be done safely. Samsung has to make sure there are no glitches with this phone and that it is widely available for anyone who wants the phone.
The other things Samsung can do to win back some customers they may have lost would be to lower the price of the phone. Some will question if Samsung should really be selling phones at the same price point as Apple, now that there are questions about the quality of Samsung’s products. I do not have knowledge of how much profit Samsung makes on these phones, but they may want to take in less of a profit as an apology for this happening. Also, a lower priced flagship from Samsung may get people on the fence about buying a Samsung phone to pick one up.
I am hopeful that Samsung can get this situation resolved in a manner that will please both it’s shareholders and customers alike. Like any other electronic product, Samsung has it’s good products and it’s bad ones. How likely am I to purchase a Samsung phone after this incident? If you know me, you know I like to own my phones outright, have them already unlocked and do not believe in paying $600+ for a phone. There are too many other options out there for a quality phone at a cheaper price for me to spend that much on a phone that may not last more than a year and a half. But I do not discourage people from buying those phones also. Sometimes, you get what you pay for. Evaluate your needs and make the best purchase for you. Or if you really want something, it’s your money. Spend it as you wish. Let me know how likely you are to buy a Samsung product in the comment section below.