Now the subject of a class action lawsuit, Samsung said a few days ago it would recall 2.5 million Galaxy Note 7 smartphones after several of them had exploded, causing injury and property damage—and that was to recall a replacement model following an earlier recall. Both Samsung and the US Consumer Product Safety Commission asked consumers to "immediately stop using and power down all Galaxy Note 7 devices," with Samsung offering a full refund, an exchange, and $25-$100 in credit toward the purchase of a new device.
Literally the hottest phone of the year, the Note 7 received rave reviews from the press and consumers alike. One customer I spoke with on Reddit said that the phone "felt tailor made for him" and made him "want to be a better man." Other customers are keeping them since, because to the recall, they're now perceived as being 'collectable'—even if a little risky to continue to own.
When you dig a little deeper into why Note 7 owners are continuing to hold onto their devices, it's sort of bleak. The thing is, people went nuts for this phone and what it could offer. Reddit user datfoosteve told me that it was the "best phone he'd ever had" and that it "felt shitty having to give it back." That's the rub: For most customers (only 96 incidents in the US had been reported to Samsung as of last week) their phone has been fantastic and not at all on fire. There is an inevitable reluctance to hand back something you love only to receive a what you might consider to be a lesser replacement.
Many Note 7 customers are opting for a Samsung Galaxy S7 Edge as that replacement, though the sudden demand for the seven-month-old device means that not all colors are available. One customer I spoke with on Reddit told me that he had left AT&T for T-Mobile just to get the Note 7, and he was hugely frustrated that the recall had damaged his perception of Samsung. There's also a short-sighted hope among some customers online that because nothing has happened to their phone it's perfectly fine to hold onto.
The entire incident will inevitably hurt Samsung's reputation. It's bad enough that the Note 7 exploded and burned people, but that the initial replacement that was offered then did the same is a public relations disaster. Reuters even reported that the South Korean economy itself may take a hit because of the recall, which is anticipated to cost around $5.3 billion. With some speculation that Samsung pushed the release of the Note 7 to compete with the launch of the iPhone 7, fans must now turn their attention to the company's next flagship smartphone, the Galaxy S8 (which, if history serves as any indication, will likely be released next spring).
While the company has taken the best possible measures to protect customers from further risk, a survey taken before the full recall noted that 34 percent of Note 7 owners said that they had lost faith in Samsung altogether and would not be purchasing another phone from them, and a huge 81 percent of these customers had only ever owned Samsung phones. Samsung stock prior to the recall had gained 20 percent this year following three years of decline. With many customers switching to the iPhone, it looks as though Samsung's nightmare could be a dream for Apple.
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