Recall of Note 7 did not hurt Samsung’s brand

Samsung has completely recalled its Galaxy Note 7 and stoped production due to risks of catching fire. As a consequence the company lost more than $19n of stock value. At the time of the recall, analysts worried about negative consequences on the firm’s credibility and trust. The concerns were not unjustified considering the gravity of the issue and what other companies were doing at the time of the recall.

Actually there wer two rounds of recalls; in the first, which officially started on September 15, Samsung replaced faulty Note 7 with new handsets. The second recall, issued on October 10, was final and production of the Note 7 stopped. The dates are of these actions are interesting as Apple announced its new iPhone models, the iPhone 7 and iPhone 7 Plus on September 7, about a week before the first recall. Also, Google announced its new phones around these days; on October 4 the company presented its Google Pixel phones. With that in mind it is safe to assume that Samsung will not only incur costs from lost sales and recycling of the phones, but also due to damaged reputation. A recent poll, however, indicates otherwise. The poll conducted by Reuters/Ipsos revealed two things:

  • Current Samsung smartphone owners are as loyal to their brand as Apple users are
  • People aware and unaware were equally interested in Samsung’s smartphones

Also, Samsung itself stated that the majority of customers who returned the Note 7 replaced it with another Samsung model.

Although the study did not measure how much the Samsung recall weighed on the users, the result is interesting, if not unexpected, given the above-mentioned circumstances.

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