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The death knell has sounded for the Galaxy Note 7 Samsung less than two months after its release. The group was finally announced on Tuesday, October 11, stopping the production of its latest phablet – smartphones with a screen XXL. The reason : multiple cases of combustion of the battery reported throughout the world. The manufacturer had announced, earlier in the morning, the stopping of sales by asking the users to turn off their device, which has earned the title of the south Korean group to close down 8 % on the stock Exchange of Seoul.
New, this episode will be a date. The history of the “batteries explosive” will, no doubt, his entry in the manual of crisis management, where it will show how most large groups can be overtaken. Back.
it All had started. On 2 August, Samsung is launching with great fanfare its Note 7. Featuring a 5.7-inch screen, this high-end device, marketed in Europe to 859 euros, must come compete with Apple products – including the iPhone 7, the output of which is scheduled a few weeks later. For the south Korean manufacturer, it comes to solving an equation : strategic reach out of the competition very aggressive chinese manufacturers on the low-end and mid-range, to compete with Apple, which has made the top of the range its domain. The marketing of the Galaxy Note 7 has to start from August 19.
35 incidents reported in September
By the end of this summer, all the lights are green for Samsung. Carried by the exit six months earlier, the Galaxy S7 and S7 Edge, the manufacturer has seen its global market share grow beyond 22 % in the segment of smartphones, according to two studies consistent (IDC and Strategy Analytics). The financial results are in keeping with net profit up 1.7 % in the second quarter. And the pre-orders of the new Note 7 to exceed all expectations. To such A point that the brand is forced to delay the release of the phone in some countries, due to lack of sufficient stocks.
But, a month to the day after the presentation of his model, Samsung recalls the product. the ” We have received several reports of an explosion of the battery of the Note 7. We have confirmation that there is a problem, “ says the head of the mobile business of Samsung, Koh Dong-jin at a press conference in Seoul, the headquarters of the parent company.
at the Beginning of September, thirty-five cases of incidents involving the battery of the phone have been reported. The magnitude of the rescue operation is a new one for Samsung, which has already sold 2.5 million devices on the market. Initial estimates put at around one billion dollars the cost of this recall.
see also : Telephony : hunting Samsung is open
Trying to reassure the customers
New blow on 8 September : the u.s. federal aviation administration (FAA) – soon to be followed by many foreign counterparts – called owners of Note 7 to not use their “phablet” on board flights. Then it was the turn of the us Commission of consumer protection (CPSC) to call the owners of this model to turn it off and stop using it until its replacement. A few days later, Samsung is solved to formulate the same recommendation with consumers in south korea. Samsung, aware that his reputation is at stake, tries to reassure its customers, ensuring that ” their safety and comfort are his priority “. The branch also announced the replacement of all the defective devices as early as next week.
at the Beginning of October, a month after the beginning of the scandal, the south Korean manufacturer resumes sales in its home market, where, he says, 80 % of its customers have exchanged their phone. Problem : some users who have yet proceeded to the exchange and complain to see their device heating up during calls, or note a loss of fast-charge batteries. Recognizing the existence of new complaints, a spokesperson for Samsung minimizes the following : it would only be ” few isolated cases “ of phones defective, quite usual at the launch of new products.
A plane of Southwest Airlines evacuated
But on October 5, this line of defense collapses when an airplane of the airline company Southwest Airlines is discharged at Louisville (Kentucky), the phone of one of the passengers emerging from the smoke. It is a… Samsung Galaxy Note 7, that its owner had yet to replace. The case is not isolated : in the United States, four other incidents were reported. Two owners say they have been woken up in the middle of the night by the large clearance of the smoke of their phone after it had caught fire…
The repetition of the incidents – not to mention the callback operation of the terminal, which has been delayed and is still not closed – ends of tired players in the market. In the United States, AT&T, T-Mobile US and Verizon announced that they waive the right to replace the Note 7. In this context, Samsung has no other choice than to take the consequences. Tuesday, 11 October, the group asks all its partners discontinue the Galaxy Note 7.
To Thomas Husson, analyst at Forrester, the decision was itself :
” The bad management of the crisis has had a devastating effect on the Galaxy brand, and was beginning to have a halo effect on all of the Samsung products. He will now have to extinguish the fire by communicating skillfully, and perhaps abandon the Galaxy to start another. “
the Same holds true for Werner Goertz, an analyst at Gartner
” Samsung needs to rebuild the trust of consumers in order to avoid the erosion of its brand, which now threatens other products, since Samsung is also present on many other segments? from household appliances to semi-conductors passing through the connected objects or the material of data storage. Pulling a stroke on the production of the Note 7, Samsung would send a very clear message to the market, demonstrating their attention to preserve its brand as its customers “
Less definitive, Neil Mowston think Samsung can still save his phone (Strategy Analytics).
” By stopping production, will be able to take the time to solve the problem. If Samsung manages to release a V3 before the end of the month of October and to demonstrate that it is 100 % reliable, the Note 7 could be saved of the shipwreck because it is one of the best devices on the market Android at this time “
beyond that, it is the question of the strategy of the group that arises. The management of Samsung has made proof of a rush to cut the grass under the feet of Apple this summer ? Upon arrival, however, it is apple who should derive the greatest benefit from this crisis.
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