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Galaxy Note 7 ‘firegate’ – what now?

Posted on 13 Oct 2016

 

Samsung

Samsung has been in hot water recently with reports of it’s Galaxy Note 7 handset catching fire. Further problems with replacement handsets have prompted production of this device to cease. This is the biggest shock the mobile industry has seen in quite some time and I expect we will see a shake up of this space as a result.

Brand image is everything

Samsung have very deep pockets, which is fortunate as the financial cost resulting from these fires is likely to be significant. What cannot be so easily quantified however is the harm done to the brand itself. Samsung have long been seen as a leader in mobile electronics and enjoy a good percentage of profit from handset sales. Whilst this setback is unlikely to spell the end for Samsung, I believe it will hurt them for years to come. Not only will consumers likely lose confidence in all Samsung mobile devices but this fear may bleed into other Samsung hardware such as televisions and domestic appliances. With recent reports of combusting tumble dryers and ‘hoverboards’, the timing couldn’t have been worse.

Of course Samsung aren’t the only company who’s handsets have developed issues. Many will remember the ‘antennagate’ and ‘bendgate’ sagas that once troubled Apple. Whilst Apple quickly recovered there was never any real risk of injury to consumers. An exploding phone is quite a different matter and I fear Samsung face a rather steep uphill struggle.

The revelation that affected devices contained batteries of varying manufacturers suggest it’s unlikely Samsung will be able to pass the buck. Somewhere, possibly in their haste to beat Apple to the post, Samsung have failed to spot a fundamental flaw in their design or manufacturing process. Samsung will need to redouble their efforts and make restoring consumer confidence front and centre. Those old enough to remember the infamous Ford Pinto motor car will know how long it can take to restore brand image. It is possible, but it takes time and I feel it will be years until we see Samsung dominating the mobile space in quite the way they have.

One door shuts, another opens

As I write this I’m sure the offices of Samsung’s competitors will be a flurry of activity. The Note 7 is a ‘phablet’ or large screen phone with a premium build. There are few alternatives to this, with the iPhone Plus models and Huawei P9 Plus being examples. In the short term I expect manufacturers of such devices to ramp up both production and marketing of said devices. In the Android space I also expect to see some gentle discounting to prevent consumers defecting to iOS. Manufacturers such as Huawei and Xiaomi may also see this as an opportunity to increase their assault on the European and North American markets. Samsung has historically posed a significant barrier to such Chinese companies entering these markets.

Google have historically offered a ‘pure’ Android experience with their Nexus line of devices. These devices have generally been well received but have still lost market share to other manufacturers such as Samsung. The recent release of the Pixel handsets with their premium build could see consumers giving Google a fresh look. I’ve never been a fan of ’skinned’ Android and I’d love to see this herald a general move away from the likes of TouchWiz and HTC Sense. I believe Android is now polished enough to no longer need such modification.

Samsung’s dominance of the mobile space has often been at the expense of other manufacturers such as HTC. I was a big fan of HTC’s original Desire handset and I would expect to see smaller manufacturers use this situation to their advantage. Often smaller companies have the technical ability to produce quality kit, but lack the budget to market their products well. With Samsung on the ropes I expect to see more devices from smaller manufacturers entering the market.

More choice for the consumer

I’m sure owners of the Note 7 will disagree but I see Samsung’s unfortunate situation as good for the consumer. Whilst I feel some will move to Apple I doubt there will be a mass exodus. Instead I feel consumers will generally stick with Android but look to other manufacturers for their next device. Whilst initially the affected consumers are those who desire a premium large screened device, those aiming slightly lower may also now avoid Samsung’s offerings. I believe in time Samsung will dust themselves down but until then we will see more handsets at a better price point for the consumer.

I imagine many current manufacturers will be breathing a sigh of relief that it wasn’t their devices currently taking the headlines. As such I expect a lot more activity in the testing phases of these devices as the cause of these fires is not proven to be something unique to Samsung. As we demand more from our devices which in turn put more strain on batteries, improved safety is always very welcome.

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