After numerous incidents of exploding Samsung Note 7, at first, the company chose not to accept the fault on its end, after the incidents became more frequent Samsung replaced the faulty sets with new ones promising a probe into the matter. Unluckily, when the replacement units also turned out defective and started exploding the company was forced to recall the whole product. Samsung has to sustain the loss of near £2bn which leads to the burning off $17 billion from Samsung’s estimated profit.
The company is frustrated to the point that they have decided to destroy the motherboards of all the units that are returning to the company; the scenario indicates that the company will receive all its product back.
The analysts believe that the damaged reputation will not get settled with Samsung recalling the Note 7 rather the echo of this loss and disgrace might be heard for years to come because Note 7 has damaged the loyalty and trust of the consumers. It is not one product or one-time sale/profit estimates that are at stake but it might have damaged the brand itself. The public relations department might have to burn the midnight oil to make the damage go away, if at all.
It is not only Samsung that has felt the shockwaves of the Note 7 incidents but many online shopping and shipping companies are also part of the recall program. For example, Amazon, the company that has business across the globe just like Samsung, is offering refunds to the consumers who return their unit and accessories of Note 7.
On the other hand, Samsung is also offering a $100 credit for a swap with another company’s mobile phone or phablet. As financial analysts put it, it is bad enough to do something wrong the first time but repeating a mistake the second it is clear suicide for a company of this huge stature.
A case of exploding Samsungs
Mobiles are not all that this South Korean manufacturing company makes; Samsung manufactures a variety of home appliances, too, and currently, the company is in the middle of juggling safety problems. Just recently Samsung had to recall 144,000 Samsung washing machines in Australia.
One interesting common factor between both these calls is that both recalled products burst into fire.
The company is looking at a potential recall of defective laundry units in the United States, too. Back in 2009, Samsung had to recall 210,000 refrigerators and in 2007 it recalled 20,000 washing machines, again the reason was that they were prone to fire risk. Similarly, the company recalled 184,000 microwave ovens in 2003 in the United States because of shock hazard.
Samsung has not only to recover from the losses but also mend its reputation in the market. For past few years, Galaxy series had seriously hurt the profit margins of Apple; the current streak as brought to light the previous recalls made by the company. Is this tech-giant ready to face all these challenges? We yet have to see.