Samsung’s Note 7 problems are inevitably going to take the shine off its performance this quarter and in future quarters too. There’s the immediate problem of recalling and refurbishing 2.5 million Note 7 devices that made it out into to the wild. Then there are the large number of loan devices that will get used for a short period of time by those customers who choose to stick with the Note 7 and wait for a replacement device.
More painful though will be the damage to Samsung’s standing in the marketplace. The S7 and Note 7 had finally placed Samsung as a true premium device manufacturer, able to stand toe to toe with Apple in all aspects of the smartphone experience.
The battery fire issue will undoubtedly tarnish that reputation and Apple is looking to benefit as a result. Component orders for the iPhone 7 and 7 Plus are reported to have been increased in anticipation of greater demand as buyers shun Samsung devices for the safe haven that Apple offers.
Given the efforts that Samsung has made to try and minimise inconvenience to its customers that seems a real shame, but its an understandable reaction. For Apple its a ‘get out of jail free’ card, given that the limited advances made by the iPhone 7 over the 6S suggested the new phone wasn’t going to be a best seller.
Now, however, all bets are off as Apple plans for a massive consumer backlash against its biggest rival. I suspect in years to come this whole episode might form part of a valuable lesson for Samsung, but right now it must feel like its enduring the biggest, baddest beating of its corporate life.