Samsung has been plunged into turmoil over the last couple months as the company’s newest release, the Galaxy Note 7.
The Galaxy Note 7 came out in mid-August, and since then there have been widespread reports of the phone overheating and actually exploding in users’ hands.
Samsung had to initially recall over 2.5 million phones last month, offering free trade-ins for users to switch to a different, safer device while the company investigated the situation further.
But now phones are literally popping off and exploding in public places, like a Southwest flight that had to make an emergency landing over the weekend when a passenger’s phone malfunction caused brief panic.
While these exploding phones have caused legitimate safety concerns, the only serious injury has been to Samsung’s bottom line.
The South Korean tech mammoth has a leading share of the smartphone market, with notably more global users than Apple, but a wide-scale callback of the company’s signature smartphone will surely put a dent in Samsung’s wallet.
As South Korea’s biggest company, Samsung’s loss could have a negative effect on the country as well, South Korea’s Finance Minister said the recall could hurt the country’s exports:
“Right now we can’t tell what the impact will be in the long term. It’s up to the company and the government cannot interfere, but if they do scrap the model, it will have a negative impact on exports.”
Despite all of this bad news for Samsung, the Galaxy Note 7 only accounts for about 10% of the total quantity of smartphones that it exports to the world. This leaves plenty opportunity to maintain massive profits, regardless of a string of bad publicity.
Still, Samsung will have to rely on it’s customers’ brand loyalty and hope they choose to stay with the company amidst all of the turmoil.