Note 7 recall was something a company of their size could quite
easily overcome, but now that “safe” replacement devices have hit the
market with the same battery defect that plagued the original, a second recall and the discontinuing
of the Galaxy Note 7 has turned into a nightmare for Samsung. Not only
will the Galaxy Note brand be forever tarnished, but the Samsung brand
overall could have been damaged. A poor product release is one thing,
but something that puts the life of customers, as well as others in
danger is a whole different thing altogether, and investors aren’t
impressed.
Much like the majority of the world’s successful businesses, Samsung
has a large investor base from all over the world, and often have a say
in what Samsung does next and how they handle themselves. Following the
Galaxy Note 7 disaster, many of them are calling for answers, with Kim
Hyun-su, a fund manager at IBK Asset Management, a firm that controls
shares in Samsung saying that while “it’s good that Samsung made a firm
decision on the Note 7, but people are concerned about the situation
because people don’t know what the problem is”. Indeed, Samsung has been
fairly vague on the problems surrounding the Galaxy Note 7, with
initial statements from Samsung saying that batteries from Samsung SDI
were to blame, but now units with batteries from China’s ATL are
exhibiting the same symptoms. While the design of the phone itself might
be to blame,
Samsung will be under intense pressure to make sure they let their
investors know what the problem is, especially as the firm has issued
new profit guidance that is well below what any investor would have
expected from Samsung
For many, the Galaxy Note line is finished, as no product line can
recover from something like this, investors are pushing for a new
release altogether with Kim going on to say that “Samsung will move
quickly to get the Galaxy S8 ready; they have the manufacturing and
production capabilities”. The Galaxy S8 is likely to be released in
February next year, just as previous models have been, and while a new
smartphone might be the right answer for a lot of investors, rushing the
Galaxy Note 7 is likely what caused of all this, and sticking to the
standard schedule for the Galaxy S line might be the best option.
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