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Samsung: Have ‘exploding’ phones burned the brand?

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Samsung is resuming sales of its Galaxy Note 7 smartphones in South Korea following a safety recall. They are set to return to Europe on 28 October.

The company asked customers to return their handsets after some users reported their phone had “exploded” during or after charging.

The firm said that battery problems were behind phones catching fire.

Samsung had sold about 2.5 million Galaxy Note 7 devices across the world before the recall.

In South Korea about 80% of those sold have been returned to be replaced.

In Europe and North America the figure is lower but still way above 50%, according to company sources.

Samsung insiders say that 95% of the people returning their handset are opting to continue with a Samsung model. There is – they say – huge customer loyalty.

But there has clearly been a big cost, one on which a monetary value is impossible to determine exactly.

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Tarnished

Firstly, Samsung has lost a month of its carefully planned sales pitch in the campaign against Apple and its new iPhone 7.

Secondly, the brand has been tarnished. Samsung has prided itself on making the most of its components. It doesn’t outsource as much as its rivals do.

That boast of superior quality sounds hollower after the recall.

Thirdly, even if most of the offending phones have been returned and replaced, substantial numbers are still out there.

Airlines have presented passengers with a warning notice on check-in, saying the Galaxy Note 7 should not be checked in or switched on in the cabin even in flight-mode.

Will the airlines now lift the ban?

In the crucial Chinese market, the iPhone has a huge cachet. Samsung has been squeezed between Apple’s offerings and Chinese phones.

Batteries that might catch fire won’t have helped it in that competition.

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