Note 7 doomsayers sell Samsung short

Note 7 doomsayers sell Samsung short

A Samsung Note7 is pictured next to its charred battery after catching fire during a test.


Reuters/Edgar Su

We all know the Galaxy Note 7 has been a debacle, first with the exploding batteries shortly after its September release, then the “safe” replacement units catching fire in the last week. Samsung is likely to lose as much as $17 billion as a result, and the Android flagship faces possible long-term reputational damage.

There’a been a lot of hand-wringing over Samsung’s reaction, many crocodile tears shed by industry partisans, and suggestions that Samsung will be supplanted by Google or Chinese brands you likely haven’t heard of.

That’s poppycock.

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Clearly, the burning Note 7 was a debacle, and Samsung had no real choice other than to throw in the towel as it did this week. But Samsung responded to the crisis well, quickly confirming the issues and setting up a recall. Within days of the “fixed” phones catching on fire, it halted sales and recalled them, even issuing fire-resistant boxes.

Samsung faced some criticism for not going through proper government channels, as well as for not reacting faster — two incompatible requirements, by the way. But the technical causes weren’t obvious (if they were, Samsung would not have shipped the Note 7 in the first place). About 0.0001 percent of devices exploded, roughly 100 of the 1 million in customers’ hands, so finding the cause was not easy. These things take time — imagine the logistics of the just the recall, never mind figuring out the cause of the battery manufacturing defect — but we tend to forget that in today’s “now” world. As it was, Samsung recalled the devices within days.

If Samsung was to be faulted, it was in assuming the battery manufacturing issue was the only cause, an assumption that hit back hard when the “fixed” Note 7s began overheating (not quite exploding) after their release last week. Samsung doesn’t know the cause, so it simply killed the product and recalled it — the right answer.

The widely reported theory that Samsung’s release schedule for the Note 7 caused the issue holds little water with me. The device has been on a yearly schedule for many years now, like the rest of its lineup.

But there may be issues at the Note team, whose Note 5 clearly rushed the stylus, creating a hazard that could render the smartphone inoperable. Maybe a similar oversight happened with the Note 7. If so, Samsung will have to address that — the company has had an unfortunate tendency to jump the gun on new technology to try to beat Apple to market. I’ve long assumed that many Apple rumors are plants to egg on Samsung to such ill-considered actions. In recent years, Samsung hasn’t taken the bait so quickly, but maybe Samsung hasn’t completely fixed the disease.

Still, I don’t believe for a minute that the Note 7 debacle will tarnish Samsung over the long term. And I certainly hope not; in recent years Samsung has stepped up its game and cleaned up its act, resulting in Apple levels of quality and fit and finish in 2015’s Galaxy S6, 2016’s Galaxy S7, and 2015’s Galaxy Tab S. The Note 7 has great fit, finish, and security, which the overheating issues of course render immaterial. But if you want a top-notch Android smartphone, Samsung is where to go. I hope Samsung doesn’t change that commitment.

Some people say the Note 7 debacle provides an opening for Google’s forthcoming Pixel smartphone. Sorry, but the Pixel isn’t that great. Yes, it’s better than the Nexus line it replaces. But any HTC, LG, Lenovo, or Samsung midrange Android phone can make the same claim. Plus, Samsung’s very nice Galaxy S7 remains on sale, with no issues — it’s a much better phone than the Pixel, and you can get it for any carrier, not only Verizon Wireless.

As for the Chinese phones, ignore them. China is a paper tiger, with state-favored manufacturers getting unfair advantages that don’t translate to the rest of the world. I’ve been hearing about the Chinese threat for years, but haven’t seen it. Right now, Lenovo is the only Chinese brand that delivers a quality (midrange) Android phone that can compete in the world at large.

The other theme in the press is that Apple will benefit from the Note 7 debacle, getting Note 7 buyers to choose its new iPhone 7 Plus instead. Maybe a few people will do that, but not a meaningful number. The iPhone 7 and 7 Plus are very good smartphones, of course — among the best, in fact — but most people have already decided whether they prefer iOS or Android, and few switch any longer. Apple may get some reputational boost, but that would be short-lived — and not really about Apple.

I suspect a year from now, the Android market will look like it has in the last few years: dominated on the high end by Samsung, competitive in the midrange (Samsung, Lenovo, HTC, and LG), and unprofitably cutthroat in the low end (all those brands you never heard of). Sony, BlackBerry, OnePlus, and the like will remain niches at best, egged on by bloggers who like to see a contentious market.

This assumes that Samsung won’t draw the wrong lessons from the Note 7 debacle, of course, by getting too conservative or reducing its ambitions. It needs to do what Apple has usually done for years: Work out a long-term road map, focus on meaningful innovation, and put quality first. Apple hasn’t always succeeded, but it’s still the right model.