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Has Samsung done enough to calm the market?

Samsung has attracted a lot of attention for all the wrong reasons lately. It has reported that its Galaxy Note 7 “phablet” phones (phablet: cross between a phone and a tablet; for many people, not quite big enough to be a tablet, not quite pocketable enough to be a phone, inevitably it’s massively popular) have had an unpleasant habit of bursting into flames. The company has of course addressed the issue.

It delayed the launch internationally, so the devices will only come back to Europe at the end of this month. Only now are the gadgets going on sale in South Korea, where the problem was first reported. However, some of the arrant phones are still in the market.

Under 50% of the phones were returned in Europe. In the Far East the customers have taken a more pragmatic approach, with a reported 80% return rate. This might say something about the recklessness of the European customer. But where does it leave the buyer of business and public sector communications devices?

Samsung and business

The business buyer has had a rough time over the last week or so. As we reported, there are to be no more handsets from Blackberry, although another company may take over the design and manufacture (we’re just bewildered as to why they would do so). They’re almost certain to be looking for a replacement, although some won’t be – and we’ll come to that in a second.

The market leaders in the mobile space are Apple and Samsung. These figures from IDC suggest Samsung in fact has a compelling lead, although it’s worth noting that many potential Apple buyers will have been waiting for the iPhone 7, although sales in that device’s first weekend were down 25% compared to its predecessors in their first weekend, reports the Daily Mirror and other sources.

The corporate market might therefore have been expected to flock to the Galaxy 7 from Samsung. And in many ways Samsung has made the right moves in addressing the combustion problem.

When in doubt, announce it out

Granted, the manufacturer botched the product recall in China, according to CNBC. It assumed that if the problem was with the battery, the fact that Chinese models had a battery from a different manufacturer meant there would be no difficulty – until reports of flaming phones started to come from China as well.

Worldwide, though, it has made a lot of reassuring noises. It’s owned the problem, there has been no attempt to hide it. It’s ensured that as many people as possible have heard about it as possible and put a clear exchange programme in place. Also, the business community doesn’t react emotionally, it reacts by assessing risk. Consumers might baulk at buying something that has a reputation of bursting into flames but businesses will accept that stuff happens and as long as it’s addressed, they’re likely to be fine with it. Except it may not matter what the businesses think.

BYOD rules

It’s actually becoming less and less important to consider what a business actually thinks when developing a mobile computing policy. Bring Your Own Device policies, in which the employee turns up with his or her own mobile device and uses it for work, are increasingly common. It’s an exaggeration to say the whole market has gone over to that form of work but it’s moving that way, and the demise of Blackberry as a poster brand for the business community will only hasten that process. Apple’s tie-up with Deloitte might delay it, but consumers are more and more likely to select and therefore dictate the devices that go into a mobile enterprise.

This could well mean we’re back to Samsung depending on an emotional rather than logical and measured reaction to the flaming phones incidents. The good news for Samsung is that consumers are a forgiving bunch and as long as there is no repeat, the slowness in the return of the phones in Europe suggests this isn’t as big a deal as, say, Blackberry’s three-day outage a few years back.

If it happens again, there will be a real opportunity for Huawei and the other challenger brands in the IDC list above.