Samsung has finally acknowledged that the Galaxy Note 7 has too many issues to remain a viable product, and decided to stop both the selling and manufacturing of the device.
Despite the huge meltdown caused by the latest flagship, the company seems to remain a sweetheart to consumers, as pointed out by experts in a Los Angeles Times report.
One reason for which customers will stay loyal to Samsung is the hefty promotions and discounts that the company is offering, giving users plenty of alternatives to the faulty Note 7. To put it into perspective, the Note 7 comprises only about 10 percent of Samsung's shipments.
Other reasons include the deceleration registered by rival brands, as well as the perceived difficulty of changing ecosystems. Samsung also caters to its fans by offering reliable customer service and intuitive interfaces.
Tuong Nguyen, lead research analyst at Gartner, explains that the ecosystem shift is a massive psychological issue for most users.
"If your automatic car breaks down, you're not going to suddenly shift to a stick shift," he affirms.
Brand Awareness
Research firm IDC points out that about 33 percent of handsets that rolled out in the second quarter of 2016 are wearing the Apple or Samsung brand.
Samsung has the upper hand over smaller OEMs due to a huge marketing budget, which makes it easy to popularize its phones at a global scale. Rivals such as Vivo, Huawei or Oppo, on the other hand, are unable to compete in this field.
"In developed markets, people are attracted to brands they know," says Ryan Reith, program VP for IDC.
Samsung Rivals
Samsung faces some competition from Chinese phone brands such as Meizu, LeEco and Xiaomi, which are gunning for the same market as Samsung's affordable lines.
"There's a pretty strong opportunity for us in the U.S. for [affordable] smartphones," points out Hugo Barra, VP of Xiaomi Global.
Google recently unveiled its new Pixel family of handsets, but the tech company could still land on the pricey side, making it hard for many Samsung customers to join their ranks.
So far, Samsung proves that it can react in a mature and determined way during a crisis. Pulling the plug on the production of the Note 7 shows that the company is unafraid to make mistakes and take accountability for them.
The company saw its sales plummet in the wake of the Note 7 exploding batteries scandal, but it does have the resources to bounce back. Analysts are optimistic about Samsung's safety-oriented policy, which could inspire customers to stay true to the brand.
Nguyen affirms that Samsung's recall is the biggest fluke of this kind ever encountered in the mobile industry.
"In that sense, it's hard to say how big of an impact Samsung will take," Nguyen notes.
