What was thought to be a bump in the road for Samsung has evolved into something much, much more serious for Samsung. The initial Galaxy Note 7 recall was something that a company of their size could quite easily overcome, but now that “safe” replacement devices have hit the market with the same battery defect that plagued the original, a second recall and the discontinuing of the Galaxy Note 7 has turned into a nightmare for Samsung. Not only will the Galaxy Note brand be forever tarnished, but the Samsung brand overall could have been damaged. A poor product release is one thing, but something that puts the life of customers, as well as others in danger is a whole different thing altogether, and investors aren’t impressed.
Much like the majority of the world’s successful businesses, Samsung has a large investor base from all over the world, and often have a say in what Samsung does next and how they handle themselves. Following the Galaxy Note 7 disaster, many of them are calling for answers, with Kim Hyun-su, a fund manager at IBK Asset Management, a firm that controls shares in Samsung saying that while “it’s good that Samsung made a firm decision on the Note 7, but people are concerned about the situation because people don’t know what the problem is”. Indeed, Samsung has been fairly vague on the problems surrounding the Galaxy Note 7, with initial statements from Samsung saying that batteries from Samsung SDI were to blame, but now units with batteries from China’s ATL are exhibiting the same symptoms. While the design of the phone itself might be to blame, Samsung will be under intense pressure to make sure they let their investors know what the problem is, especially as the firm has issued new profit guidance that is well below what any investor would have expected from Samsung.
For many, the Galaxy Note line is finished, as no product line can recover from something like this, investors are pushing for a new release altogether with Kim going on to say that “Samsung will move quickly to get the Galaxy S8 ready; they have the manufacturing and production capabilities”. The Galaxy S8 is likely to be released in February next year, just as previous models have been, and while a new smartphone might be the right answer for a lot of investors, rushing the Galaxy Note 7 is likely what caused of all this, and sticking to the standard schedule for the Galaxy S line might be the best option.