Getting to the root cause of the issue was paramount, but what we learned from this process has ramifications, not only for Samsung but for the industry, because lithium-ion batteries aren’t going away anytime soon. The investigation process Samsung went through over these past few months would have been quite difficult for a manufacturer without Samsung’s scale, capital, R&D facilities and workforce. Dedicating 700 researchers to evaluate 200,000 smartphones and 30,000 batteries in a newly built testing facility is dedication.
Of course, a lot was on the line here for the world’s leading smartphone maker. Trust of both users and employees was at risk, and winning that trust back was paramount.
In early October, we at Creative Strategies conducted a study to assess the U.S. smartphone market. One of the areas we wanted to evaluate was the impact, if any, that the Galaxy Note 7 incident had on the brand’s smartphone market. We were bullish then, and we are bullish now, that Samsung will recover from the Note 7 recall. Only 28 percent of U.S. Android owners said the Note 7 caused them to have a more negative opinion of the Samsung brand. Numbers were even lower among Samsung owners.
Consumers are generally quite forgiving and have a relatively short memory. The car industry has seen several recalls over the years, yet consumers continue to buy. The mobile industry has also seen recalls, but nothing to the extent of the Note 7. Of course, what made the Note 7 such a test case is how passionate its users are and how unwilling they were to give up their units, pushing Samsung and carriers the extra mile to get the phones back.
Samsung must show consumers that it has set in place checks and balances that will allow the company to continue to bring new technology, new designs and new features into the market in a safe and effective way.
Samsung was quick to take responsibility and step into action. Communication is where the smartphone leader could have done with more clarity. Whether due to cultural differences in communication styles or having the complexity of bringing together the Consumer Product Safety Commission, carriers and retailers, Samsung’s messaging was not as direct as it could have been. Digital messages, however, were pretty clear, from warnings being displayed every time the phone was charged to limiting the charging capacity of the phone to ultimately bricking the phone.
Samsung, like any vendor in every sector that has ever had a recall, cannot promise that its products will never again suffer from a malfunction. What can be done, however, is to show that necessary steps have been taken to limit the chance of that happening again.
What is even more important when we are talking about a market leader, especially one that has gained that position by adopting new technologies early, is to show that its innovation streak will not be limited by fear. Samsung must show consumers that it has set in place checks and balances that will allow the company to continue to bring new technology, new designs and new features into the market in a safe and effective way. The new eight-point battery safety check that Samsung will implement going forward is an important step in recognizing that innovation should also come to QA, testing, safety and manufacturing processes.
A Market Leader Acting Like a Leader
The fact that made the Note 7 recall also unusual is that the cause of the issue involved several parties: Samsung and two battery suppliers. While we do not know the names of the suppliers, it would be safe to believe they are not exclusive Samsung suppliers. The use of lithium-ion batteries is also not limited to Samsung or these two suppliers.
If indeed there will be a Note 8 on the market in 2017, there’s a lot Samsung can do to butter up those users, from incentives on upgrades to limited editions to early access.
Samsung’s mobile head, DJ Koh, stated during the press conference that, during the investigation, the researchers filed several patents in battery technology, patents that will be shared with the industry. We would need more details to understand the significance of these patents, but this is the kind of action we would expect from a market leader, especially one that has a pretty substantial battery business.
Despite the many stories that broke last Friday about Samsung putting the blame on its suppliers, I did not hear that in the press conference. Although I am confident that Samsung will require changes in the QA process implemented by its supplier, the focus of the messaging was centered on the changes Samsung will implement going forward, including the appointment of a battery advisory group. As much as there is skepticism around how two different suppliers could have two independent battery issues, I do not believe that Samsung cut corners in bringing the Note 7 to market. As the industry pushes more designs and features, and as users push the capabilities of these devices, making sure all that can be done in a safe manner is paramount.
Innovation needs to involve all aspects of the production process and Samsung is making this point very clear. While adding steps to the process adds costs and time, I expect Samsung to be able to integrate the new steps without adding considerable development time or costs on to new products.
I had initially thought that Samsung should move on from the Note franchise and deliver a different product with similar capabilities. After months of hearing countless airport announcements referring to the banned phone as the “Galaxy Note 7,” “a Samsung phone,” “the Galaxy phone” and anything in between, I no longer think the Note 8 would suffer as much as I initially thought. Better put, anything that will come after the Note 7 will equally suffer, whether it is related to it or not.
Samsung apologized, provided answers and solutions. What remains to be done is to make sure users who returned their Note 7 receive the phone they want and a little extra love from Samsung. If indeed there will be a Note 8 on the market in 2017, there is a lot Samsung can do to butter up those users, from incentives on upgrades to limited editions to early access, etc.
While I can already envision the headlines referring to the next Galaxy phone as “the one that hopefully will not blow up” or “not as hot as the Note 7,” I am hoping we will move on — like most consumers will.