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Data: Will exploding phones hurt the Note 8 launch?

The arrival of the Samsung Galaxy Note 8 is right around the corner, but will the legacy of the exploding Note 7 have any impact on the launch?

Published onAugust 21, 2017

The Galaxy Note 8 is almost upon us and while there’s certainly the familiar release excitement in the air, there’s that niggling feeling in the back of many minds about how people are going to reactive to the successor to Samsung’s infamous exploding smartphone.

As much as we all want to look past last year’s mishap to the no doubt impressive piece of hardware Samsung is about to announce, there’s a lingering question about how consumers and pundits alike are going to react to the upcoming announcement, and whether or not this will have any impact on the sales of the new Note 8. But perhaps people’s perceptions have changed since the Note 7 recall and it’s all blown over?

Business is booming

A year is quite a long time, and since then Samsung has launched is flagship Galaxy S8, quite successfully I might add. At the last official tally in mid-July, Samsung’s CEO DJ Koh proclaimed that sales of the Galaxy S8 and S8 Plus are 15 percent higher than the Galaxy S7 series during the same period.

Unfortunately, we don’t have any exact numbers and can’t say for sure whether it’s the sleek new design, the lack of a mid-year refresh, or something else that has driven this extra demand. But what we can probably safely assume is that the Note 7 debacle clearly hasn’t hindered the business performance of Samsung’s other smartphone releases, at least not in a way that’s easily reflected by sales.

Samsung on track to overtake Apple in profits thanks to record-breaking quarter
Sales of the Galaxy S8 and S8 Plus are 15 percent higher than the Galaxy S7 series during the same period.

Backing up its claims of improved handset sales, Samsung reported a stronger-than-expected Q2 operating profit. Although this was mostly generated by an increasing in NAND and RAM prices, remember that Samsung sells its own memory and processor tech to its smartphone business, so good smartphone sales mean strong chip sales. On the handset side, Samsung generated $3.7 billion in operating profit following the S8 launch, a slight decline year-on-year which the company attributed to higher component costs, as mentioned above.

Following the Galaxy S8, Samsung has also relaunched the Note 7 as the Fan Edition in South Korea, complete with a smaller, safer battery. If you check out the reports from Korea, there appears to be considerable interest in the refurbished phone since its relaunch. Although we shouldn’t assume that South Korea’s enthusiasm for any and all Samsung products is reflected globally.

Samsung’s OLED and semiconductor revenues were up last quarter, driven by strong mobile sales.

Consumer perceptions

With the Galaxy S8 launch passing unfazed and profits on the up, the bigger question is whether consumers will be a lot harsher on the actual Galaxy Note 7’s successor – the Note 8.

According to a survey conducted by marketing company Fluent, this may not be the case. Samsung fans still appear to be rather loyal to the brand and the general consensus seems to be that the event didn’t cause too much damage to the company’s reputation.

When asked whether the battery saga had any impact on Samsung’s brand perception, only one in five of the total respondents believed it had a largely negative impact, which falls to just 13 percent among Samsung owners. 21 percent believed it had a slightly negative impact, with 30 percent suggesting it made no difference at all. The others simply didn’t know. Putting that another way though, about 51 percent of people think the Note 7 dented Samsung’s reputation in some way, but will that equate to a reluctance to purchase?

Survey respondents were split 50/50 as to whether the Note 7 fiasco would make them less likely to buy at Note 8 or not.

Interestingly, 63 percent of existing Samsung owners state that the incident has made no difference to their likelihood of purchasing Samsung phones in the future. Although this number falls to 46 percent if the respondent owned a Note 7. Which is understandable given their direct involvement and the hassle involved in the recall.

When asked the same question, the total number of respondents were split 50/50 as to whether it would make them less likely to buy or not. So while Samsung fans may be remaining loyal, general consumers are more wary about buying future Samsung phones now, as you would expect. This won’t instantly translate into a loss of sales, but we may see consumers take more of a wait and see approach this time around.

Granted, 1,500 participants isn’t a huge sample of the smartphone owning public, but it’s a reasonable size to get a gauge of general opinion.

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The same survey also found that 37 percent of people (32 percent of Samsung owners) didn’t even know Bixby existed.

This isn’t the first survey to suggest that the prevailing consumer perception about Samsung and the Galaxy Note range hasn’t change much, if at all. Back in November 2016, not long after the recall, a Reuters/Ipsos opinion poll found that there was very little difference in consumer purchasing intentions between those who were and weren’t aware of the Note 7 recall. Perhaps Samsung handled the recall well enough to ensure most consumers.

Samsung brand escaped the Note 7 recall untainted, poll finds

Furthermore, we can augment this data with some trusty Google search trends data. Looking at the trend for searches of “exploding phone”, we can see that although there was a good three or so months of heavy interest in the topic, search level are much lower now. As you would expect, the news is old and people have mostly lost interest in the subject. Importantly though, we haven’t seen an notable uptick in search hits for the old subject, even though the launch of the Galaxy Note 8 is right upon us.

Additionally, the association with Samsung seems to have lessened over time, as we can see from the late December spike which was much smaller for the term “Samsung exploding phone”. We can see that general searches for exploding phones are higher than before the Note 7 fiasco. The incident has definitely heightened consumer awareness, but we’re well past peak chatter.

Samsung Galaxy Note 8: Everything we know so far (Updated: August 18)

Wrap up

Of course here in the enthusiasts bubble, inevitable comparisons will be drawn between the Galaxy Note 7 and Note 8, many will be interested in the battery changes made this time around, and we’ll almost certainly continue to hear cautious words and advice mentioned when talking about purchases. However, when we step back and examine broader consumer opinions and data, there’s notably less interested in the whole saga one year later.

Observing the success of Samsung’s Galaxy S8 launch, the Korean interest in the relaunch of the Galaxy FE, and the lack of a prolonged reputation hit for the company, there’s little evidence to suggest that the Galaxy Note 8’s launch sales look set to suffer from the Note 7’s legacy. Ultimately though, we’ll have to wait for consumers to talk with their wallets.

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