The Note 7 is dead: What will Samsung do next?

Samsung will first need to figure out what really went wrong with the Note 7 and find a viable fix for the same.

Written by Nandagopal Rajan | Published:October 12, 2016 7:52 am
samsung, samsung galaxy note 7, galaxy note 7, note 7 scrapped, note 7 production, note 7 replacement, note 7 sales, note 7 fire, note 7 battery The Note 7 might well have been the last of the Samsung Galaxy Note devices. (Source: File/AP Photo)

Samsung has finally decided to strike off the Note 7 from its sales and production line. However, this wise move has come not before making the Samsung Galaxy Note 7 arguably the biggest debacle in the world of the technology or wiping off $18 billion from the market value of the Korean tech giant. What is surprising is that a fiasco of this magnitude came from one of the largest consumer device makers in the world and not a small startup which got one bit wrong due to lack of experience.

Samsung will now be worried how it will regain lost credibility and market share. While the issue was with just one device, it will be hard to convince at least some users. They might rather play safe. But to Samsung’s advantage is the fact that its new mid-range devices like the On series and J series have been well received in markets like India where the volumes come in.

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However, it is left with a bigger issue of not having a device to really take on rival Apple’s 7 series in the crucial October-December quarter. In fact, every Note 7 not sold could potentially be an Apple iPhone 7 bought. That is because in the Android sphere, there are not many top-end devices left.

In India, for example, premium Android devices are hard to find. In fact, very few devices are priced above Rs 50,000 — the new HTC 10, Asus Zenfone and the Samsung Galaxy S7 edge. Out of these only the S7 edge has mass appeal and the muscle to take on the Apple in any way. While budget Android devices are really good, there are still those who would like to be seen only with a premium smartphone and don’t want to use and Apple device, this is the market the Note 7 has just vacated.

Also, the Note 7 fiasco brings about a big question. What will Samsung do now?

Ideally, the company has been managing the year with two flagships — the S series and the Note series. The Note 7 should have been able to hold fort for half a year, but that is not going to happen now and the next S, maybe the S8, is at least a few months away. With the holiday season across the world just a month away, Samsung has its job cut out. Given production cycles it will be near impossible to expedite the S8. Bringing in a new device to fill that gap will be even tougher, as flagships are planned many quarters in advance and you can’t really be nimble footed with smartphone SKUs. What might seem like a viable option is to spin off the Note 7 into a new SKU, let’s say the Samsung Galaxy Note Neo or something. If there is any company that can do something like that it is Samsung, given that it pretty much controls its entire production line.

However, for that to happen Samsung will first need to figure out what really went wrong with the Note 7 and find a viable fix for the same. Even if that is managed, it might be hard to convince customers to pick up a Note again. In fact, the Note 7 might well have been the last of the Samsung Galaxy Note devices, in my books the most productive of all Android smartphones.