The End of the Galaxy Note 7 Saga

By Wednesday, December 21, 2016 No tags 0

One of the biggest recalls in the consumer electronics history continues to attract attention. But Samsung Galaxy Note 7 is officially dead. So far the South Korean electronics company managed to recall more than 90 percent of the Galaxy Note 7 and bring them back home. The phone is not being made any more, can not be bought from legitimate sellers, and on 19th December the company is issuing an ‘angel of death’ software update which will prevent the phones from charging and ‘will eliminate their ability to work as mobile devices’.

As a product Samsung Galaxy Note 7 has had a very short product life cycle. A product life cycle is the sequence of stages from introduction, through growth and maturity to decline of a product on the market. As there is a lot of investment in new products each company aims to prolong the life cycle of their products. Many products quickly come to the market and decline and seems that Samsung Galaxy Note 7 is one of those products.

It was officially released on 19th August, 2016 as a successor of Galaxy Note 5 and launched for sales at the very start of September. Four months later it is good for nothing and Samsung is ready to shut it down. This decision of the Samsung company is unlikely to have been made under external pressure, as some analysis point out. And it shows lack of compassion on the side of Samsung which may bring further destruction to their image.

What is the cost of the biggest blunder in the electronics industry? As theory tells us every product requires a lot of advertising at its launch on the market. Samsung Galaxy Note 7 had a lot of this prior to its launch in August, 2016. After that the galaxy Note 7 phones started bursting into flames. By October Samsung managed to recall a lot of phones and replace them with new ones but the replacement phones only stoke the file under the inflammable situation of the Samsung Galaxy Note 7. The claims that the explosions were caused by the batteries produced by a third party disappeared into thin air as the replacement phones also continued to cause the problem.

Killing the Galaxy Note 7 means Samsung will lose potential sales of 19 million phones, or nearly $17 billion, which the company was expected to make during the device’s product cycle, according to Credit Suisse analysts cited by Reuters.

Samsung has $70 million on its balance sheet and can absorb the losses caused by the Samsung Galaxy Note 7 unrealized sales.  But the bigger problem for the company will be the impact of this crisis on its reputation and the Galaxy brand.

During this holiday season Apple will surely try to capitalize on its iPhone 7, and so will Google with its new smartphone.  Whether Samsung will be able to gain the trust of consumers is to be seen in the new year when they launch their Galaxy Note 8 or the planned fold-able smartphone.

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