Samsung had a great start to 2016 with the Galaxy S7. The existing flagship series is without a doubt a hit. It played a major role in turning the company's fortunes around and Samsung wanted to continue the momentum with the Galaxy Note 7. For all intents and purposes, the Galaxy Note 7 seemed like it had the potential to be huge. It was very well received at launch and many started predicting that Samsung was on track to have one of its best years due to the great performance of the Galaxy S7 coupled with the great potential of the Galaxy Note 7.
Merely a couple of months after it was formally announced nobody is talking about the Galaxy Note 7's potential anymore. They are talking about its tendency to explode for no apparent reason. Soon after the handset was released in August reports started coming in that the Galaxy Note 7 was burning up. Samsung later confirmed that its new flagship had a battery cell defect and that it was launching a replacement program to replace all units shipped since launch with new, safe ones. The replacement program entered its final phases in many markets across the globe by the end of last month and Samsung even started to resume sales but as we're all finding out, the Galaxy Note 7 debacle is far from over.
In the past week alone there have been more than ten reports of the replacement Galaxy Note 7 exploding from three different countries. These reports can no longer be treated as isolated incidents as clearly something is wrong here. Samsung's carrier partners in the United States will not be putting their reputation on the line anymore. Verizon, AT&T and T-Mobile have all decided to stop selling the flagship until there's more clarity from Samsung. It was reported earlier today that Samsung has halted production of the Galaxy Note 7 but the company later sent out a statement saying that it has only adjusted the Galaxy Note 7's production volume to conduct a detailed investigation and perform additional quality tests. Samsung is yet to confirm if there's a safety issue with the replacement Galaxy Note 7, it's working with consumer protection agencies in China, South Korea and the United States to investigate these reports.
Many are predicting that this will inevitably lead to a second recall for the Galaxy Note 7. Consumer confidence in the new flagship likely dipped as a result of the first recall but Samsung might have been able to salvage the handset's reputation after the recall. If circumstances lead it to a second recall, the Galaxy Note 7's reputation will be damaged beyond repair. Sure, many of the company's diehard fans won't even give up on this handset then, but Samsung might find it hard to hold on to potential Galaxy Note 7 customers who are open to alternatives. We're already seeing many news outlets saying that the Galaxy Note 7 is dead in the water and that people just shouldn't buy it even if all this blows over. People already have concerns about this handset and this neverending media hype fueled by faulty Galaxy Note 7s is further going to erode consumer confidence.
Recalls are not an anomaly. They happen in every industry. Companies routinely recall products and even discontinue them if there's something inherently wrong with them. It won't be the end of the world for Samsung if it does decide to discontinue the Galaxy Note 7, not that it has given any indication of even considering that option. The Galaxy Note 7 will inevitably become a blemish on Samsung's record but in no way does it encapsulate what the company has achieved in the past and what it's capable of doing in the future.
We know that Samsung is capable of keeping up with the best of them and that it's capable of fighting back. Just two years ago the company was struggling badly in the global mobile market. We were seeing a double-digit decline in revenues and operating profit every quarter and many started predicting that perhaps we were witnessing the birth of another Nokia or BlackBerry. It tried to turn things around with the Galaxy S5 back in 2014 but by the end of the year, Samsung had more than 40 percent of unsold Galaxy S5 inventory in warehouses as customers just weren't picking up its flagship.
The company went back to the drawing board and came up with radical changes for the Galaxy S6. It felt like Samsung had truly created a premium device and it predictably performed much better than its predecessor. This year, Samsung showed us how it can take something that's very good and make it even better. That's precisely what it did with the Galaxy S7 and this year's flagship sold so well that it provided Samsung with its record-breaking second quarter of the year.
Samsung has long been painted as a company that doesn't innovate or just isn't capable of coming out with a product that will actually turn its customers into loyal fans that keep buying new devices every single year but that's just not true. Samsung has always shown us that it's ready to fight back and has the talent and resources at its disposal to make something truly amazing. It would be unfair to view all future Samsung devices through the Galaxy Note 7 prism. Not all future devices will have this issue just like all existing devices don't.
The Galaxy Note 7 might very well be the worst performing device that Samsung's mobile division has ever created but it's likely going to be what pushes Samsung to do significantly better with the Galaxy S8. It has every reason in the world now to respond to its critics by pushing the envelope and launching next year's flagship smartphone with major hardware changes as well as feature improvements. I have no doubt that this is precisely what Samsung is going to do now. Reports out of Korea already suggest that Samsung has chalked out massive hardware upgrades for the Galaxy S8 which include but are not limited to removal of the home button, a dual-camera system, a display that's curved on the top and bottom edges and more.
There has been some speculation recently that if Samsung decides to kill the Galaxy Note 7 it might go for an early Galaxy S8 launch. Since it's believed that the Galaxy Note 7 has these problems because Samsung decided to rush it in order to beat the iPhone 7, it's unlikely that Samsung will do something like this with the very next flagship. We can expect the company to go the extra mile to ensure that these issues do not repeat themselves with the Galaxy S8.
Enough with the doom and gloom associated with the Galaxy Note 7. Samsung's entire presence in the global mobile market can't be stained by one device. Let me tell you this Samsung, what doesn't kill you makes you stronger, and I for one expect you to bounce back in spectacular fashion with the Galaxy S8.