It is well known that the Samsung Galaxy Note 7 phones have been exploding due to faulty batteries. Over the past couple weeks since the sale suspension of their phones, Samsung has been fighting to keep their customers loyal. With the release of the new and improved iPhone 7 and 7 Plus, that mission quickly became much easier said than done. Caitlin Huston from Market Watch said that on September 12th, the Samsung stock experienced the largest one-day price decline in their 28-year history as a public company. The South Korean-based company has been struggling ever since to try and find a solution to this hazardous problem.
It was finally announced last Monday, September 19th, that replacements were going to become available to the United States by Wednesday the 21st. This was a relief to some, especially to the heads of the company. Huston also mentioned that analysts say even with the new replacements, the Samsung stock will remain around the same level it was after the major decline when the recall occurred. In an interview with Aaron Pressman from Fortune, the CEO of Sprint, Marcelo Claure, says this recall will not be affecting the Samsung brand for the long term. However, some analysts claim that this hiccup will result in a $5 billion loss this year for the company.
Even though this is a tough blow for Samsung, their number one challenge at the moment is getting their customers to actually shut down and return their phones to the stores. There have only been ninety-two reports of malfunctioning batteries in the United States, and Claure stated in the interview with Pressman that, “Consumers have a way of going about their business. They look at 1 in a million explodes or 10 in a million explodes”. This claim still poses a potential problem for the company because there could still be people at risk at Samsung’s expense.
Up until the point of the new Samsung Galaxy Note 7 replacement, there have been complaints from the few customers who actually tried exchanging and returning their phones. Apparently, only a few were allowed to exchange their phones in stores. Jill Disis from CNN mentioned that the customers who purchased their phones online or elsewhere were all turned away and were denied a new replacement phone. This treatment of customers was another contribution to why the stock so quickly plummeted.
This action did not seem to affect Claure. He firmly believes that the public will forget this whole situation within six months. “Stuff like this happens,” he said, “It has always happened. The world that we live in today just exposes it a thousand times more (with) the Internet, social media, and all that. But having issues with phones has been happening for quite a long time.” Samsung is still fighting to bring their stock back up, and to prevent their customers from switching over to the iPhone 7. This past month, Huston’s data stated that the Samsung stock dropped by 7%, whereas the Apple stock has risen by 4%. Needless to say, the timing of the recall and the release of the iPhone definitely helped Apple with their sales. Time will only tell if this recall will truly be forgotten by the public, or if it will be a permanent stain on Samsung’s reliability record.