After the disaster with the Galaxy Note 7, smartphones withdrawn from the market in the beginning of the week, for safety reasons, with a decision unprecedented, Samsung has reduced its estimates of its revenues and its earnings. The company has revised the forecast on its last quarter ended at the end of September, estimating an operating profit of 4.6 billion dollars and not more than 6,8 billion. Samsung has also changed downwards its estimates for revenues: 41,4 billion dollars instead of 43.2.
The previous forecasts were a week ago and they were already more cautious than usual, in view of the ongoing crisis with the Galaxy Note 7. Samsung is believed to have solved the problem with the recall and replacement of the 2.5 million smartphone defective, that only the United States had caused at least 92 crashes, but later discovered that the security problems were also the models sostituivi delivered by the company. The news of an airplane evacuated in Louisville, Kentucky, because of a Galaxy Note 7 was burned, and the report of other episodes around the United States, had led Samsung to stop the replacements and put an end to the production of its smartphones. The Galaxy Note 7 were presented in August and would have had to make direct competition to the iPhone 7 in these months, especially in view of the lucrative period of christmas shopping.
there are still No official estimates on the cost of Samsung and the failure of the Galaxy Note 7, but according to analysts, could have a direct cost to the company of at least $ 4 billion. To these should be added the enormous damage to the image of the largest smartphone manufacturer in the world, which until now had never had security problems with their devices. In the first half of the week, Samsung has lost in the bag about 10 percent of its value with the loss of 8 percent in a single day, the largest in the last 8 years for his title. The company is gigantic and is active in numerous fields, from home appliances to the production of ships, and has accounts in solids: from the beginning of the year retains the upside on the stock exchange equal to about 20 percent.
Samsung has now faces two considerable challenges and complementary: quickly recover credibility in dealing with clients and convincing them to purchase other smartphones, to compensate for at least part of the lost revenues that had been expected with the Galaxy Note 7. The early signs are not encouraging: the company expects that the majority of users involved in the appeal of the Galaxy Note 7 will choose the option of a full refund, to buy a smartphone of another brand, and not the ability to switch to another Samsung device like the Galaxy S7. For this reason, the company has revised its estimates of growth and is preparing to significant losses in its mobile sector. The transition of its customers to the competition is never good news, in a sector very fierce as that of the telephony is very poor: on average a user changes the smartphone every two years, so Samsung may lose sight for a nice piece of hundreds of thousands of people, who do not trust most of his brand.
The Galaxy Note 7 presented in August were the latest smartphone of importance on the calendar of Samsung for this year, except for surprises, you will not see new models until the beginning of the new year, when Samsung introduces the new series Galaxy S. it Is a great opportunity for the competition to fill the vacuum left by the Galaxy Note 7, especially in the United States where there was a high volume of sales for Christmas. In addition to Apple, among the producers that could take advantage of, there is Google, which last week introduced the Pixel, the new smartphone with which it intends to increase its presence in the sector with the ambition to make competition not only with other manufacturers of Android phones such as Samsung but also to Apple.
During the crisis of the Galaxy Note 7, Samsung has been accused of reacting slowly and, above all, to have communicated little with his clients: he has suspended the sales only after several reports of accidents, has never explained with precision the causes of the suspension, has initiated a recall campaign and again, he has provided few details when you are presented with the smartphone replacement. Even today, weeks later by the first cases, no one knows what went wrong in the Galaxy Note 7 and the Samsung has generally talked about the problems with the batteries. From initial investigations, refer to some sources to Bloomberg, it seems that the problem of the original models of the smartphone to be due to defective batteries produced by Samsung SDI, Samsung is one of the major shareholders; the problems to models substitute would be caused by the battery of another manufacturer, where Samsung had approached in the hope of resolving the problem of the overheating and explosion of the phone.
The lack of certain information and the decision late to stop the production are not benefiting to the image of Samsung. According to analysts, the only way to recover credibility goes from a complete openness and maximum transparency on the problems that have plagued the Galaxy Note 7, Samsung needs to honestly explain what went wrong, to tell you why it is so complicated to design and build secure devices, especially with regard to the batteries, prove that you have learned something to not repeat errors of this type in the future and apologize to its customers.
At the distance of six years, all of you still remember the so-called "antennagate" by Apple, when it was discovered that the iPhone 4 had reception problems if held in a certain way; who knows what will remain in the collective imagination the idea of the Galaxy Note 7 that point, and white bring you even burn it yourself, or explode. Apple recovered in a hurry the credibility in addressing the problem: Steve Jobs organized a press conference to explain how you design a smartphone, where are placed the antennae, and offering solutions to the problem, including the free distribution of an elastic band to put around the phone to better insulate the antenna from contact with the skin of the hand. The crisis was averted and Apple solved the problem in the iPhone 4s, evitandosi a serious image damage for its most important product, and cost effective. Samsung is still time to do something similar, and especially not to lose its most loyal customers, and loyal: he must prove that it was an isolated problem and to recall the successes achieved up to today from its Galaxy series.
And another problem may be linked to the brand used by Samsung for its smartphones. So far, the company has sold almost all its phones the most important using the name "Galaxy", followed by the name of a series, such as S7 or memo Notes 7. Presentations, promotions, reviews, and the exhibitors in the shops of any other Galaxy will remember the majority of users have those phones of Samsung that burned alone," not great advertising. It is too early to say, but Samsung in the coming months may decide to change the name of its new series of smartphones, just to avoid the eternal memory of the worst and most dangerous mobile phone ever produced in its factories.
Finally, much of the management of the internal crisis of Samsung will depend on the ability of the company to better implement the delicate shift of power between the members of the powerful Lee family who control it. The chairman Lee Kun-Hee has 74 years old and suffers from serious health problems that have led it to entrust the management of Samsung to his son Jay Y. Lee, who is 48 years old. The mobile division is less than a year under the supervision of D. J. Koh, and there are those who are questioning his leadership following the problems with the Galaxy Note 7. The government of South Korea attends with great apprehension to what is happening inside and around Samsung, which plays a central role in the economy of the country.
Samsung is not only the largest smartphone manufacturer, but it is also one of the largest electronics companies around the world. The problems with the Galaxy Note 7 is a blow for the division that deals with mobile devices, but it should have consequences that are more contained about the company in general. Only in the last year Samsung has produced revenues of over 177 billion dollars, with earnings of around $ 16.5 billion and has a market value that may was almost equal to 162 billion us dollars.
