Earlier this week, Samsung had confirmed that it was delaying shipments of its new Galaxy Note 7 to conduct additional tests for product quality. Today the Yonhap News Agency is reporting that Samsung is expected to announce a recall of its Galaxy Note 7’s in less than week – this could be upwards of over 500,000 units. This is certainly not what Samsung needs for both its image and bottom line. The Galaxy Note 7 is their premier device, and this is the last thing Samsung wants to happen. However, a Samsung official said, “”The most important thing is the safety of our customers, and we don’t want to disappoint our loyal customers.”
The official said the explosion problem is related to some of the batteries used in the Galaxy Note 7 – however, the problem does not appear to be too widespread as less than 0.1% of the Galaxy Note 7’s were affected and the problem can be resolved by replacing the defective batteries. The problem is the logistics of how to go about a fix – customers already have some of the devices, carriers have them stocked in their warehouses and retail stores, and some are still in the factories. Samsung claims they will have the results of their investigation and what corrective measure will be taken within a week. The Samsung insider said they have no plans to delay the announcement, as “the decision will be made in consideration of maximum consumer benefit.”
It appears that Samsung is taking the proper course of action by not hiding the issue and taking on the responsibility of fixing it quickly. Their stock prices dropped to a two-week low, most likely brought about by the exploding batteries. If Samsung does have a massive recall of the Galaxy Note 7, those stock prices are sure to take a big hit – at least temporarily – until Samsung fixes the problem and most all, owns up to it and takes action. This course should bring back some credibility and trust in the company – something that is very important to a proud Korean company. It does not help that Apple will be releasing its new iPhone shortly and can use this as leverage to steal away potential customers.