Last week I was in Korea to experience a new direct-lit LED Cinema Screen recently launched at a Lotte Cinema in Seoul. While I was there I had the chance to sit down with the President of Samsung Electronics Mobile Communications, D.J. Koh, and CMO Younghee Lee to talk broadly about Samsung’s future. The focus was on what they learned from the Galaxy Note7 (Note7) issues and how committed they are in regaining the trust of the millions of Samsung users out there.
What Happened Since the Galaxy Note7 Recall
Back in January, Samsung held a press conference in Korea detailing what caused the Note7 incidents as well as what steps Samsung was taking in making sure there would be no risks for the future. During the press conference, Mr. Koh and executives from UL, Exponent and TUV Rheinland, who lead an independent investigation into various aspects of the Note7 incidents explained that in both cases the short circuit was caused by a damage to the separator that keeps the positive and negative electrodes from meeting with the jellyroll. In the case of battery A, the tip of the negative electrode was incorrectly located in the curve of the device. In the case of battery B, the high-welding burrs 0n the positive electrode resulted in the penetration of the insulation tape causing direct contact of the positive tab with the negative electrode.
Since then, Samsung implemented multi-layer Safety Measures that improved safety standards for the materials in battery design, added brackets around battery protection and improved algorithms that regulate battery charging.
Samsung also collaborated with the MIT Technology Review on a white paper that was published last week. The report shared more insights into the new 8-Point Battery Safety Check Samsung started implementing with the Galaxy S8 and S8+.
There is no doubt that Samsung went far and beyond the call of duty with this new process, with a goal of sharing its finding with the broader industry. While initial communication around the recall could be faulted, the rigor of the investigation and the follow-up steps taken cannot. Samsung has tried to be very transparent about how it can work to avoid another incident and also how to be better prepared in case something might happen again. Catching the issue at production is almost as important as avoiding the issue in the first place.
Samsung Smartphone Owners are Ready for the Note8
No matter what Samsung says and does though, at the end of the day, what really matters is neither the reports reassuring everything is under control nor the press articles still referring to the Note7 explosions. What will make a difference to Samsung Galaxy Note8 sales rests in the confidence consumers still have in the brand.
This week, SurveyMonkey Audience released the results of a study they conducted among 1000 US consumers to gather their interest in the upcoming smartphone as well as their view of the Samsung brand.
I will focus my analysis on Samsung current owners vs. overall smartphones owners because the Note family has not been a mainstream device. Its large screen size and pen input were not for everyone and certainly not a device than in the past generated a lot of churn from iPhone.
So, how do current Samsung owners feel about the brand?
Brand loyalty remains strong, as current owners are either extremely likely (47%) or very likely (34%) to consider Samsung when it is time to replace their current device.
Awareness of the upcoming Note8 release is good across all smartphone users interviewed with only 38% saying they have not heard about it. As you would expect, awareness among Samsung current owners is much higher with 25% saying they like to keep up with the latest news relating to Samsung devices and another 46% saying they heard about the Note8 but they don’t know much about it.
When it comes to the most interesting features rumored to be coming with the new model, 70% of Samsung current owners are most interested in the phone being waterproof, 35% in the dual camera and another 35% in the Fingerprint scanner.
For current Samsung owners, the top three most appealing reasons they would consider a Note8 are Features (52%), Reliability (50%), and Large Screen Size (38%). These data points underline that the Note as a device family has been seen by Samsung users as the flagship product. The Note7, in particular, with its strong feature set really helped to broaden the appeal to a wider audience outside of the large screen lovers. Reliability, as the second most wanted feature, does not seem to signal much concern that what happened with the Note7 might repeat with its successor.
If this were not enough of an indicator, when current Samsung smartphone owners were asked if they would consider buying a Note8 in the aftermath of last year’s recall, 45% said yes and 37% says maybe leaving only 18% saying no. Among the rejecters, the strongest reasons for lack of consideration is the high cost (31%) while the issues with the Note7 impact intention for another 28%.
Interestingly, most concerns seem to vanish when cost is not an issue. When current Samsung smartphone owners who said they would not consider buying the Note8 were asked if they would use a Note8 if it were free, 66% said they would and another 27% said maybe while only 7% said they would not.
Note Owners are Samsung’s Fiercest Fans
When you look at some of the data I just shared, but narrow it down to Note7 owners, the loyalty to the Samsung brand and the passion for the product comes across very strongly. Although the base size in the sample is more limited compared to the other cohorts, I think this data gives a good indication of how this segment behaves.
Note7 owners still think very highly of Samsung with 37% saying they find the brand extremely reliable and another 43% saying it is very reliable. When it comes to their next phone 43% are extremely likely to consider a Samsung device and another 30% are very likely.
It will come as no surprise to see that only 20% of the current Note7 owners have not heard about the Note8. What is very interesting is to see that 63% of Note7 owners would consider buying a Note8 and another 24 would maybe consider it.
The Note7 recall did, however, shake its owners’ loyalty somewhat, as you would expect with all the publicity the incidents drew. When it comes to the three most appealing reasons for considering a Note8, features comes first at 52% and a better camera comes second at 59% followed by a large screen size at 43%. Reliability, that came second among overall Samsung owners, drops to fourth place at 33% among Note7 owners. This to me shows a somewhat coy stand on the Note brand but one that does not reflect on the overall brand and certainly not on the overall benefits users see with this device.
Ultimately sales will tell if Samsung is really over the Note7 incident but the signs leading up to the launch and the performance of the Galaxy S8 thus far seem to indicate that it is the case.