Last week there was a massive recall on the Samsung Galaxy Note 7 phones after reports were filed of the phone overheating and “exploding.” Two and a half million phones were recalled, and one million of those phones were recalled from the United States. The call was made by the Samsung voluntarily, urging consumers to power down their devices and return them as soon as possible. This recall has had a large impact on consumers beyond just halting their social media presence. Airlines like United Arab Emirates and Virgin Australia have banned the use of the Samsung phone while flying. In addition, the United States Federal Aviation Administration (FAA) has advised passengers to not put their phones in luggage that they will be checking. If that isn’t enough to generate a change in taste and preferences for consumers of the Samsung device, the iPhone 7 has just been released. This substitute good – that already has a high demand – becoming available at a moment of crisis for Samsung could contribute to a large loss of consumers who would typically have bought an android over an iPhone. While an article by BBC says that Samsung plans on speeding up their recall and replacing the phones, the damage has already been done and the South Korean company will need to work to regain the trust of its consumers as it attempts to get back into competition against Apple.
this does seem like a very damaging blow. but didn’t Teslas have a burning battery problem at one point? I guess they benefitted from the absence of a ready substitute.