Sept. 21 marks the beginning of the end of a hellish recall fiasco for Samsung, which ironically took place smack dab in the middle of Mercury Retrograde. Jokes aside, carriers are now announcing availability of replacement handsets of the Galaxy Note 7. The manufacturer expects to have 60 to 70 percent of devices deemed possibly susceptible to explosion off the market by next week, after which normal device sales will resume, according to Phone Arena .
However, Samsung’s long-term recovery from this misstep remains unclear. The promising smartphone was originally expected to sell 12 million units before the end of the year. Now, Baystreet Research analysts predict the Galaxy Note 7 will struggle to match sales figures of the Galaxy Note 5. Rumors already suggest an early launch of the Galaxy S8 in 2017 to make up for missed sales of the Note 7, while reports indicate massive drops in Samsung stocks.
Though the manufacturer's actions have been highlighted with extreme criticism, some analysts say the Galaxy Note 7 recall should been seen as more of a black eye than a death blow for Samsung. The market should expect to see aggressive efforts from the smartphone maker to get back on track.
“Just at the apex of when [Samsung was] going to meet the quality and the build and the innovations coming from Apple they have this happened, which is unfortunate, but it’s a big enough company that it can rebound from this and be able to catch up again,” IHS analyst Wayne Lam told iDigitalTimes.
Not That Big A Blow?
Because of the flagship status of the Galaxy Note 7 and its eight-digit sales projections, there has been an exaggerated vision of the intent of the smartphone. The large-sized device, which created a new smartphone category in 2011, is known for being a test bed of sorts for Samsung’s innovative and often never-before-seen features. The Galaxy Note 7, known internally as “Project Grace,” introduced an iris scanner biometrics option. The line itself introduced features including the S-Pen stylus and curved edge display to the mobile market.
Despite the growing popularity of the Galaxy Note line, the phablets remain niche devices and not ones that Samsung expects to sell in particularly large numbers. “[The Galaxy Note] does not make up the bulk of the [Samsung’s] volume shipments. Those are for the Galaxy S models as well as the mid-range models it sells globally,” Lam told iDigi.
The Samsung Galaxy S7, which released in March, was projected to hit 25 million units shipped by June 2016. Several Galaxy S smartphones have had yearly shipments of 40 million units or more.
In comparison, Samsung’s initial shipments of the Galaxy Note 7 entailed 2.5 million units, less than half of which were affected by the recall, according to the U.S. Consumer Product Safety Commission . Though reports have indicated Samsung stands to lose up to $5 billion in the aftermath of the recall, the overall number of devices affected remains relatively small. Samsung has shipped about 500,000 replacement devices as of Wednesday.
Continued Efforts
With new devices now available at carrier stores, Samsung is also doubled down on efforts to get owners to return their Galaxy Note 7 handsets. Several reports indicate most owners haven’t brought their handsets in for exchange or refund, despite a program being set up to offer alternate devices on loan until new Note 7 models became available.
In addition to software updates to reduce the charging capacity of recalled Galaxy Note 7 handsets still in circulation, the manufacturer is also pushing notifications to device, reminding owners of the explosion risk and exchange policy. Rumors suggest Samsung may also completely disable at-risk Galaxy Note 7 handsets if they’re not returned.
Critics would have likely prefered this level of urgency during Samsung’s initial, yet unofficial recall, which began Sept. 2. Complaints largely entailed a lack of direction about when and how old Galaxy Note 7 handsets would be collected and new ones distributed.
“The fact that this was a high-end, flagship product and that it happened quite soon after launch certainly tarnishes [Samsung’s] reputation.” Gartner analyst Tuong Nguyen told iDigi. “How they communicated the process for consumers and the speed at which they did this left room for improvement.”
Samsung put out a statement Sept. 16, following the official Consumer Product Safety Commission recall apologizing for the inconvenience and promised increased efforts to rectify the situation. Since then the manufacturer has largely kept its word, having new handsets available for exchange by Sept. 21.
Outlook For Future Galaxies
A recent Bloomberg report charged Samsung with accelerating the release cycle of the Galaxy Note 7 to beat the iPhone 7 to market. This effort may have produced errors in development , which led to the volatile batteries and defective devices. However, there are arguments that Samsung’s race to market shouldn’t been seen as a negative.
“Sometimes, failure happens when you push development time and technology at the rate that Samsung does,” Lam said. “Recall that Apple only has one major [smartphone] release a year, but Samsung regularly introduces new versions at about twice the pace of Apple.”
Moving forward, Samsung likely won’t accelerate the release of the coming Galaxy S smartphone to preserve quality control and to maintain device’s 12-month launch cycles, Nguyen noted. Observing how the manufacturer handles upcoming smartphones should be invaluable. There will likely be major changes to Samsung’s development process, as well as to how it tackles recalls, both internally and in collaboration with carriers, according to Lam.
“Samsung will likely put their resources to work to pull in the Galaxy S8 release and perhaps even make a larger gesture to early adopters of Note 7’s to thank them for their support,” Lam added.
Don’t Call It A Comeback
Pundits from ZDnet and Technobuffalo have already spoken about their prompt Galaxy Note 7 replacements, while Samsung told CNET that replacements are up to 25 percent from 13 percent last week. Apparently, extended waits for iPhone 7 availability may help Samsung replenish some of the time it lost from when the Galaxy Note 7 wasn’t on sale.
New Galaxy Note 7 handsets feature a green battery status icon to differentiate them from older models, which have a white battery icon.
Some carriers are certain the initial excitement for the Galaxy Note 7 will return when the devices are readily available once more.
“We start shipping the new Notes this week already,” Sprint CEO Marcelo Claure told Fortune . “We’re going to pick them up and six months from now nobody will remember that there was a Note 7 recall.”