Samsung Hoped To Take Advantage Of 'Dull' iPhone; Plans Literally Backfired
SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF) hoped smartphone consumers would be faced with two options: buy its advanced Note 7 or Apple Inc. (NASDAQ: AAPL)'s "dull" iPhone 7 with few upgrades and new features.
According to Bloomberg Technology, Samsung's executives were operating under the assumption earlier this year that the iPhone 7 wouldn't offer any new innovative features and would look similar to prior models. Samsung believed it faced a rare opportunity to "leap ahead" of Apple with an iPhone-killer device.
As such, Samsung's senior executives, including its phone chief D.J. Koh, accelerated the launch of the Note 7, which they felt would "dazzle" consumers and "capitalize on the opportunity." The new phone boasts a high-resolution screen, iris recognition security and a powerful and fast-charging battery.
However, Samsung's plans backfired — literally, as the rushed process resulted in dozens of phones catching fire. The company was forced to announce it will replace all 2.5 million phones already delivered to customers.
"What was supposed to be a triumph had turned into a fiasco," Bloomberg stated.
The recall of millions of devices wasn't Samsung's first major obstacle. As noted by Bloomberg, Samsung didn't necessarily have a game plan on how customers would actually get a replacement device.
"The battery issue arrived at the worst moment for Samsung and it seems like there was a delay in reacting to this communication crisis," Thomas Husson, an analyst at Forrester Research told Bloomberg. "This may indeed be due to the change in top management."
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