Samsung plans to sell refurbished versions of the incredible flaming Galaxy Note 7 smartphones.
Samsung’s Note 7s were permanently scrapped in October following a global recall, roughly two months from the launch of the near-$900 devices, after some phones caught fire. A subsequent probe found manufacturing problems in batteries supplied by two different companies – Samsung SDI and Amperex Technology.
Analysis from Samsung and independent researchers found no other problems in the Note 7 devices except the batteries, raising speculation that Samsung will recoup some of its losses by selling refurbished Note 7s.
Samsung’s announcement that revamped Note 7s will go back on sale, however, surprised some with the timing – just days before it launches its new S8 smartphone in the United States, its first new premium phone since the debacle last year.
Samsung, under huge pressure to turn its image around after the burning battery scandal, had previously not commented on its plans for recovered phones.
“Regarding the Galaxy Note 7 devices as refurbished phones or rental phones, applicability is dependent upon consultations with regulatory authorities and carriers as well as due consideration of local demand,” Samsung said in a statement, adding the firm will pick the markets and release dates for refurbished Note 7s accordingly.
The company estimated it took a $5.5 billion profit hit over three quarters from the Note 7’s troubles. It had sold more than 3 million Note 7s before taking the phones off the market.
Samsung Electronics has ruled out design flaws as the reason why its Note 7 caught fire and blamed the two battery makers.
The outfit has delayed its Galaxy S smartphone as it attempts to enhance product safety following an investigation into the cause of fires in its premium Note 7 devices.
The investigation has taken months and Samsung seems convinced that it was someone else’s problem despite smart money being on the fact the phone was too thin to take any battery safely.
Samsung initially blamed battery faults in batteries made by its subsidiary and swapped them for batteries made by another supplier which also caught fire.
What is curious then was Samsung’s obsession with getting the Note 7s off the market when customers were ignoring the recall. After all it would have been easier to issue them with a new battery and had done with it.
Samsung mobile chief Koh Dong-jin said procedures had been put in place to avoid a repeat of the fires, as investors look to the launch of the South Korean tech giant’s first premium handset since the Note 7, the Galaxy S8, some time this year.
“The lessons of this incident are deeply reflected in our culture and process,” Koh told reporters at a press briefing. “Samsung Electronics will be working hard to regain consumer trust.”
However Koh said the Galaxy S8 would not be unveiled at the Mobile World Congress (MWC) trade show in Barcelona, which begins on February 27, the traditional forum for Samsung premium product launches. He did not comment on when the company planned to launch the new handset.
Again if the problem were the battery then this action would be unnecessary. Samsung and its suppliers would have worked out a way to track the fault. However, if it really were a design problem then Samsung would have have to rethink the new phone too.
Another odd part of the story is that Samsung said it accepted responsibility for asking battery suppliers to meet certain specifications and did not plan to take legal action against them.
Google’s Pixel phone might be rather nice, but it appears to be suffering from battery problems.
While these problems do not mean that they do a Note 7 and spontaneously combust, it does mean that they do an Apple and shut down when they still have 35 per cent of their power left.
It looks like they are suffering from the same shutdown bug that plagued the Nexus 6P where the device would prematurely turn off at 25 to 35 percent.
A few Reddit users are reporting that their Pixel devices are also suffering from the same shutdown bug. Some Pixel phones would prematurely shut down at or around 30 percent and would not turn back on until a charger is connected.
Vrski_15, who started the thread claimed that twice in last five days, has the phone shutdown abruptly while he was in middle of something. In both instances, battery was between 25-35 percent, and the phone under normal conditions should have lasted for at least next 3-4 hours.
In the case of the Nexus 6P, Huawei said that this was not a hardware problem but a software-related one. However, users found that the problem persisted even after downgrading to Android Marshmallow. This led Huawei to investigate further with Google, and although the company hasn’t revealed the cause yet, it is probably related to the problem that these Pixel users have been experiencing.
Those who insist on hanging onto the Samsung Note 7s despite the warnings that they will catch fire will wake up to find their phones bricked soon.
Samsung announced that it will be issuing a software update to US Note 7s that will prevent the phone from charging or working as mobile devices.
The move comes a little over a month after Samsung capped charging on US Note 7s at 60 percent, and two months after Samsung fully recalled the phone because of explosions.
Samsung has done its best to get the phones back and offered customers financial incentives to exchange their phones and has issued updates in various countries that have made the phones less useful.
But there are still people that have decided to keep their melting phones.
Samsung said the software update will be released starting on 19 December and will be distributed within 30 days.
This software update will prevent US Galaxy Note7 devices from charging and will eliminate their ability to work as mobile devices. “Together with our carrier partners, we will be notifying consumers through multiple touchpoints to encourage any remaining Galaxy Note7 owners to participate in the programme and to take advantage of the financial incentives available.”
The global recall of Galaxy Note 7 smartphones has not hurt US consumers’ willingness to buy Samsung products, according to a Reuters/Ipsos opinion poll.
Of course, opinion polls are not considered accurate these days but it is nice to know a survey has suggested that Samsung is still OK. It revealed that Samsung smartphone users were as loyal to their brand as Apple customers, only without the psychological need to evangelise.
Those who knew about the recall were as interested in Samsung phones as those who did not.
Among those aware of the recall, 27 percent would first consider a Samsung smartphone if they were to shop for a phone, the poll showed. Among those who did not know about the recall, 25 percent would look first at a Samsung device.
The poll found that Samsung’s customers were fiercely loyal to their brand. Some 91 percent of current Samsung users would likely buy another Samsung smartphone, and 92 percent of current users would probably buy another Samsung product in general.
There is a similar brand loyalty among current iPhone owners – 92 percent would likely buy another iPhone and 89 percent would likely buy another Apple product.
So basically it looks like the Samsung recall was a problem which existed in the mind of the Tame Apple Press and not in reality.
Jan Dawson of Jackdaw Research said the recall was mostly limited to early adopters rather than the majority of Samsung’s customer base, which limited negative user experiences.
“Your own personal experience trumps what you read and what people tell you,” Dawson said.
Samsung has said that customers chose another Samsung model as a replacement for the Note 7 in many instances, without giving more detail. It has said nearly 85 percent of the recalled Note 7 devices had been replaced or returned through its refund and exchange program as of Nov. 4.
Samsung Chief Executive Kwon Oh-hyun has admitted that the outfit needs to pull its socks up in the wake of the costly withdrawal of its Galaxy Note 7 smartphone.
Although he didn’t mention the not-so-magnificent 7s, Kwon said in a statement Samsung employees should look back and ask whether they had been complacent in their work.
“We have a long history of overcoming crises. Let us use this crisis as a chance to make another leap by re-examining and thoroughly improving how we work, how we think about innovation and our perspective of our customers.”
At the moment, the company is drawing up a cunning plan to recover quickly from the withdrawal of the fire-prone Note 7 in October. But the fiasco raised concerns about Samsung’s quality control systems. So far no one at the firm has been publicly held responsible or been made to clean out their desk and be escorted from the building.
It is widely believed that the incident shows up problems within the huge multi-national caused mostly by its size, which had been seen in the fact that its bottom line has not been particularly great and the fact its phones are not doing as well as they should.
At the end of last year, Gartner’s research director, Roberta Cozza, said that Samsung will be able to fend off Apple and rising Chinese vendors with “a solid ecosystem of apps, content and services unique to Samsung devices that Samsung can secure more loyalty and longer-term differentiation at the high end of the market.”
So far it has not managed this feat.
The Tame Apple Presses campaign to get its iPhone 7 selected over the Samsung Note 7 has failed to damage Samsung’s bottom line.
Since the iPhone 7 was launched the Tame Apple Press has been running scare stories about the Note 7 and over reacting to a battery problem which cased half a dozen to over heat. Samsung recalled the Note 7 and replaced the battery and the Tame Apple Press rubbed its paws with glee claiming that Samsung would suffer a billion dollar loss from having to recall the phones.
It turns out that did not happen.
Samsung said that it expects third-quarter profit to grow 5.6 percent, beating estimates, as a pickup in chip and display earnings off set its smartphone woes.
The world’s biggest smartphone maker said its operating profit for July-September was likely $7 billion, compared with the 6.4 billion tipped by a Thomson Reuters StarMine SmartEstimate of analysts’ forecasts. A year earlier operating profit was just under $7 billion
Revenue for the quarter likely fell 5.2 percent the South Korean firm said. This was much less than the Tame Apple Press predicted.
Samsung’s semiconductor business did really well, ironically flogging its chips for the new iPhones and other products launched ahead of the peak year-end sales season.
The Note 7 problems could also boost Samsung’s chip business. Industry executives say the sudden need for chips in 2.5 million replacement phones is exacerbating already tight memory market conditions, which could push prices higher.
Paul Romano, chief operating officer at U.S.-based electronic component distributor Fusion Worldwide, said the firm’s clients, which include Samsung, are currently having a harder time procuring memory chips. Some smartphone makers are also trying to secure more of the chips as they see an opportunity capitalize on Samsung’s mis-steps and boost handset sales, Romano said.
Samsung has promised to re-launch its flagship Note7 smartphone across Europe well before year-end, but has warned that it might not be until next year that it fully recovered from the defective battery fiasco.
David Lowes, Samsung’s chief marketing officer in Europe, said he expected new Note7s to be available everywhere by the end of November and well before the end of the fourth quarter.
The outfit has pledged to sell no new models until it fully completes the exchange of existing Note7S with faulty batteries,. An estimated 2.5 million Note7s were sold before the battery flaws led Samsung to issue a global recall early this month.
Samsung plans to resume Note7 sales in South Korea on 28 September Sales are to resume in Australia and Singapore in October, according to the company, which has not yet said when they will be available in other regions.
“We are confident that we can start to make up any ground that we have lost and get that momentum back into our business… get that total momentum back as we exit 2016 and set ourselves up for a strong 2017,” he said.
The Note7 was recalled in 10 markets globally, including the United States and Samsung’s home market of South Korea. Most of the affected phones sold in Europe shipped to three markets: Britain, Germany and France, Lowes said.
Lowes thinks the entire recall could be done in two weeks, clearing the way for new phone sales, although he admits this might be a tad ambitious given the complexity of reaching consumers through its extensive chain of distributors and marketing partners.
“Our mindset is to be expediting this over that time period and not have it continuing and continuing. Lowes cautioned that this goal may prove ambitious in practice.
Lowes said there was still pent-up demand for its marquee phone product in Europe, which was still largely in the pre-order rather than mass roll-out phase, with Note7 not yet available in many markets after launching in August. Samsung has no plans to scale back on its original marketing plans, he said.
Samsung will start a software upgrade next week to limit the battery charging cap of Galaxy Note 7 to 60 percent which is designed to stop explosions.
The Over-the-Air (OTA) software upgrade will commence on September 20, 10 am in South Korea and it is not really going to solve the battery problem. It is more designed to prevent the not so magnificent seven exploding when users ignore warnings to turn the thing off.
Samsung wants users to return the phone so they can put in a new battery. When the battery overcharges it is more likely to explode, so the software update prevents that. Of course it makes the phone less useful, but it is better being less useful than turning the user into a suicide bomber.
Samsung is in talks with telcos from nine other countries where the phablet is available to deploy a similar software upgrade.
Galaxy Note 7 has a battery capacity of 3,500 mAh, but the forced upgrade will enforce it to 2,100 mAh.
The measure is meant to protect people who are still using the Note 7 despite recommendation to halt use.
When the exchange starts on September 19 in South Korea, the tech giant will also offer to pay parts of the data fee.
Last week, the US government asked owners of Note 7s to immediately power down the phones and halt use.