What will the withdrawal of Galaxy Note 7 do to Samsung's equity?

By Anirban Roy Choudhury , afaqs!, Mumbai | In Digital | October 19, 2016
The brand needs to invest in some serious damage control, feel experts.

Steward: Do you have a Samsung Phone?

Passenger: Yes.. Why?

Steward: Is it by any chance Samsung Galaxy Note 7 ?

Passenger: Yes...

Steward: For safety purposes, we cannot allow you to board with the phone that you are carrying. You'll have to either cancel your flight or leave your phone....your phone can catch fire anytime, and is hence, considered as a threat to safety...

Passenger: What if I put it on flight mode?

Steward: That does not help, it is still considered a threat to safety

Well, this is what a hypothetical conversation between a steward at the airport and a passenger carrying Samsung Galaxy Note 7 would sound like.

Samsung Galaxy Note 7

The smartphone manufacturing giant Samsung's Galaxy Note 7 variant, priced at Rs 61,000 has been banned by many airlines. It all started when visuals of the phone catching fire were noticed in the United States. The US was the first country to put the phone on the prohibited list of items to be carried and ban it. Australia, Europe, and Asia soon followed a week later. The airline ban has now spread all across the world.

Reacting to this global ban, Samsung has issued an official statement which says, "Since the affected devices can overheat and pose a safety risk, we are asking consumers with a Galaxy Note 7 to power it down and contact the carrier or retail outlet where they purchased their device." The statement adds, "Consumers who have a Galaxy Note 7 device can now exchange their phone for another Samsung smartphone, or receive a refund, under the terms of the expanded US Note 7 refund and exchange programme."

So, what will the withdrawal of Samsung Galaxy Note 7 do to the Samsung equity? afaqs! finds out .....

Ambi Parameswaran, author and brand consultant

Ambi Parameswaran

Samsung has a major product failure in its hand. And, I was shocked to hear on the airline PA system last week that passengers were advised not to use the Samsung Galaxy Note 7 during the flight, even in the airline mode. That is serious denouncement of a brand. I am sure, Samsung has experienced people advising it on what to do, but this is a great B School case in the making.

Firstly, the company needs to admit that there's a problem and come out in the open about what the problem is. It also needs to tell if any other Galaxy product is going to be withdrawn, as well as clearly identify the problem, making sure none of the other Galaxy products have the faulty components. The next step is to put out safety information about all the other top-end Samsung phones so that users and potential buyers are assured that all is well. Samsung is best advised to take a huge haircut now, in order to avoid going bald early.

Siddharth Parwatay, managing editor, Digit Magazine

Siddharth Parwatay

The debacle will certainly dissuade early adopters. And, in the tech space we all know how important those early adopters are. These are the guys who pre-order before reviews are out, they are the ones who pitch tents, wait in serpentine lines outside stores on the day of the launch, and most importantly, they are the brand's biggest unofficial promoters. With the Note 7 debacle, I expect consumers to be more careful now.

Ajay Gahlaut

On the other hand, if you look at Apple and Bendgate, I doubt if any fanboys really waited to see if the new phones bend or not. They just assumed Apple would've fixed the problem and placed their orders anyway. Of course, it's one thing for a phone to bend and quite another for it to explode. I expect wariness.

Ajay Gahlaut, executive creative director, Ogilvy and Mather

It's definitely done big damage to the perception. It is being talked about everywhere -- airlines, stores. Samsung has already started the damage control though. It has announced various offers and other customer satisfactory announcements. Restoring the damage done to the perception won't be easy for Samsung; it needs to put in serious efforts in brand perception management.

Search Tags