Muted iPhone 7 sales release, Samsung at a disadvantage after battery fires

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Apple prides itself on being able to whip up the excitement as it puts each new handset on sale but the iPhone fever was rather muted this time around.

One explanation is a switch to online ordering cutting down the traditional queues outside shops

And Apple was a bit of a victim of its own success with shortages of the more popular models.

JUST IN: Apple</a> CEO <a href="https://twitter.com/tim_cook">tim_cook opens Palo Alto, CA store on first day of iPhone 7 & 7 Plus sales pic.twitter.com/CwPg2mcZaO

— CNBC (@CNBC) September 16, 2016

In Australia – the first place in the world selling it – the very first customer complained he could not get the larger size jet-black one he wanted.

Marcus Barsoum, who had spent two nights camped outside the Sydney store, said: “I’m still very sad that I’m not going to get a jet-black of any phone. I thought Apple being Apple they would have some, they wouldn’t sell out through pre-orders, they would have some aside for loyal fans like me that line up.”

It was the same story in New York for Andreas Francis who said: “I’ve been here for a week and a half. I was trying to get the 7 Plus and the new jet-black, but they don’t have the 7 Plus or the jet-black, so I ended up getting the regular black, then the 7.”

China syndrome

In the key market of China the system was also changed so that the only people at the shops were those coming to collect pre-ordered phones.

In China online interest was reportedly muted compared with previous releases. Chatter about the iPhone 7 launch on Chinese microblog Weibo has been far more muted than when the iPhone 6 debuted in 2014.

Apple’s Greater China sales dropped by a third in April-June, albeit after more than doubling a year earlier, while its market share has fallen to around 7.8 percent, placing it fifth behind local rivals Huawei, OPPO and Vivo.

But Beijing customer Chen Xinyu pointed out Apple is still popular and may have gained an advantage from Samsung’s issues with exploding batteries on its flagship handset: “I still think it has a strong appeal, plus because of the Samsung Note 7’s safety problems perhaps a lot of users who wanted to buy Samsung will now buy the iPhone 7.”

No lines for iPhone 7 in London — Because people learned about the internet https://t.co/W4uKbVZ55b

— CNBC (@CNBC) September 16, 2016

Samsung plays catch-up

Samsung is rushing to complete a costly recall of the device. It had to pull Note 7 smartphones from 10 markets after dozens caught fire due to faulty batteries.

It plans to resume selling new Galaxy Note 7 smartphones to South Korean customers from Sept. 28 and the US soon afterwards.

The recall has put it at a major disadvantage according to investment manager Ross Gerber of Gerber Kawasaki: “Apple got the gift of all gifts with Samsung creating an exploding phone and the fact that the Samsung Note is a disaster actually really helps Apple.”

Fire phone? https://t.co/vAOhUiLZ5D

— Jim Cramer (@jimcramer) September 16, 2016

Samsung’s brand image has been tarnished and it was criticised by the US Consumer Product Safety Commission for trying to initiate a recall on its own instead of following proper reporting procedures.

Elliot Kaye, the head of the Commission, told reporters about one million phones are effected in the US and he gave this advice: “Well certainly, if it starts charring or it gets overheated, step away from the phone, make sure that it’s of course, if it’s contained, it’s not near anything combustible and immediately – certainly if it’s a fire hazard, contact the fire department, call 911.”

Recall of Samsung #GalaxyNote7 is now official. Return it for a free replacement or refund: https://t.co/DMKTJoPIy2pic.twitter.com/7wYVuGOGwa

— Elliot F. Kaye (@ElliotKayeCPSC) September 15, 2016

With Apple gaining momentum from the release of the iPhone 7, Samsung is desperately keen to salvage its smartphone sales and its profits in key markets during the busy end-of-year shopping season.