Trying to retain customers after the Galaxy Note 7 disaster Samsung is offering cash incentives.
Having had to scrap the high-end device because some burst into flames, Samsung is giving the equivalent of 90 euros to people who exchange their Note 7 phones for another Samsung product, but much less compensation – around 23 euros – for those who want a full refund and who decide to switch to another smartphone maker.
South Korean Kim Chan-Young opted for that anyway, saying: “I bought the Note 7 because I liked it more than the S7 edge. I don’t want to have an S7 edge, so I’ve decided to opt for a refund.”
But Huang Mengjie, a customer in Shanghai, remained loyal. He explained: “I still support Samsung because I trust this brand. It can make good phones. I exchanged my Note 7 for an S7 this time, which also means I still trust Samsung. I didn’t switch to another brand.”
In Kuala Lumpur, Malaysia, mobile phone shop owner Muhammad Sharil was concerned about his losses: “When this issue cropped up, we were afraid customers would no longer trust Samsung products. I hope they can overcome this problem and if possible, Samsung should take the initiative to put out more advertisements and return confidence to their buyers, because we are also affected by these incidents.”
Samsung is increasing its marketing and promotional efforts for other Galaxy smartphones to try to cushion the financial blow from the demise of the Note 7 but analysts noted the biggest risk is to its reputation, leading to a loss of market share.
“Industry experience, such as the decline of Nokia and BlackBerry, shows how successful manufacturers can lose market share particularly quickly in the handset business,” the Fitch ratings agency wrote.
Samsung’s shares rose 1.4 percent on Thursday after a long run of losses, showing investors have confidence in its ability to bounce back.
South Korea’s central bank has said the Note 7 fiasco could undermine the country’s economic growth, but it need more time to fully assess the effects.