Samsung's Note7 Debacle Is Bad, but Survivable: Analysts - Page 3

Ultimately, Samsung will survive the Note7 embarrassment in the marketplace and recover from the ordeal, said Kay. "It's a black eye from a PR point of view, but I think financially they'll probably be OK. It will have a financial impact, but it won't sink the ship. When the Samsung Galaxy 8 comes out [in early 2017], they'll be back in the game."

Note7 customers who have original or replacement Note7 handsets are being told by the company and by the U.S. Consumer Product Safety Commission (CPSC) to power down their smartphones immediately and exchange them for another Samsung smartphone, including a Galaxy S7 or Galaxy S7 Edge, or seek a full refund where they bought their devices. Consumers who have questions about what to do with their phones can go to the company's Website at, or call the company at 1-844-365-6197.

The Note7 debuted in late August and quickly was the source of reports about battery fires and explosions. Samsung addressed those initial reports by investigating the devices that had fires and starting its own global recall, and then in September cooperated with U.S. regulators at the CPSC when the agency issued a government recall of a million of the handsets due to at least 100 reports of fires and explosions from consumers.

But in late September, after new post-recall phones began being distributed, new reports of battery fires began arriving. The first came in from a consumer in China who said that his brand-new, post-recall Note7 smoked and caught fire, while earlier in October another replacement Note7 reportedly began smoking in a Southwest Airlines jet in Texas as the aircraft prepared to depart.

Instead of showing off its flagship Note7 phone to a waiting marketplace, Samsung had to concentrate on fixing a worrisome fire problem and hoped that its consumers didn't start heading for the exits.

The CPSC, which ordered the Samsung recall in September, quickly launched an investigation into the Note7 fire incident on the jet.

The Note7 had some similarities to Samsung's S7 and S7 Edge smartphones, which were released in March, as well as some new features. The Note7 was a 4G LTE phone with all-new iris-scanning capabilities for security, an integrated S Pen stylus, a first-ever "Secure Folder" feature and other updates aimed at making users productive and creative. It was slimmer and more rounded compared with the previous version, the Note 5, which debuted in August 2015.

Highlighting the Note7 was a 5.7-inch quad HD dual-edge Super AMOLED display, a Qualcomm Snapdragon 820 octa-core 64-bit processor, 4GB of LPDDR4 memory, 64GB of on-board storage, a 3,500mAh battery with quick charging, a microSD slot for additional storage and the Android 6.0.1 Marshmallow operating system.