Can Samsung Recover From the Note 7 Disaster?

Samsung (SSNLF) has been on the back foot ever since the company’s much-anticipated flagship device—Galaxy Note 7—started exploding or catching fire. Currently, Samsung and Apple (AAPL) are the only two significant players in the smartphone industry, as they hold majority of market shares. But, many few trivial companies are growing gradually by offering cheap smartphones with advanced and high-end features.

Few months ago, Samsung launched its flagship Galaxy S7 and S7 Edge.
Both the models performed well and successfully managed to become top smartphones worldwide.

After the launch of Galaxy S7 models, the company was very much excited to launch its new monster smartphone, Galaxy Note 7, which was intended to be a tough competitor for Apple’s iPhone 7. However, after the launch of Galaxy Note 7, it was found that many of the devices exploded due to the battery concerns.

When Samsung came to know about this issue, the company announced an official worldwide recall for Galaxy Note 7. However, the unpredicted Galaxy Note 7 recall signifies the company’s biggest embarrassment in recent history, and possibly the most exasperating scandal its smartphone division ever experienced.

Moreover, the company confirmed that it has replaced around half of the Note 7 devices in U.S, which are approximately 500,000 units, and 200,000 units in Korea.
Can Samsung Recover From the Note 7 Disaster?
Image by Pexels / Pixabay
Not only this, the company is also taking some additional steps to certify the safety of customers, comprising a software update that assists them identify safe batteries, and drops the maximum charge of bad batteries.

Apart from this, Samsung is also performing x-ray tests before shipping, along with additional quality tests going forward.

It is very obvious to say that Apple’s newly launched iPhone 7 will gain benefits from the Samsung’s Galaxy Note 7 issue, as it was the only direct competitor of iPhone 7. However, the Apple iPhone 7 also doesn’t have a clean image, as some iPhone 7 users have reported that it is producing hissing sounds. While the hissing sound is nothing compared to exploding devices, I think Samsung will emerge out of this fiasco in the long-run.

All in all, Samsung has accepted its mistake and is putting in a lot of effort to clean its image. The company has taken a smart move by replacing all the Note 7 devices and not many customers are going to switch their loyalties because of this incident. Hence, investors should use the recent pullback to buy Samsung as the company’s long-term future looks bright.
Published on Sep 30, 2016
By Prudent Investor

Copyrighted 2020. Content published with author's permission.

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