There are concerns that Samsung’s reputation is beyond repair after the decision was made to axe the Galaxy Note7 smartphone amid safety concerns.
Samsung brought a halt to production of the handset earlier this month after receiving a number of reports that phones were catching fire. The Research Director for Gartner, Roberta Cozza, said that this may be the worst recall ever in the mobile phone industry, and the repercussions could be significant, leading to permanent damage to the company’s reputation.
Richard Windsor, Technology Analyst for Edison Investment Research, stated that Samsung was still supplying the handset after concerns were raised early on and that this will affect consumer trust in the brand.
It is believed that the scrapping of the Galaxy Note7 will cost around £13.8 billion, or the equivalent of 19 million handsets. Early in September 2.5 million handsets were recalled after early reports of fires, and replacements were issued, with the company claiming that the product was safe. However, other concerns were soon raised about the handset.
The situation has led to many former Samsung customers choosing handsets from rival manufacturers, and the company’s market share looks set to drop from the 22.3 per cent that it held at the end of June. At the time, Apple had 12.9 per cent and Huawei had 8.9 per cent of the market share. Experts also believe that this is a good opportunity for Google to move into Samsung’s territory with the new Pixel range of smartphones. Samsung may also be at risk for taking a hit when it comes to other handsets in the Galaxy range.