Samsung may have halted production on the problem-plagued Note 7, but its woes won't end with this latest recall if mobile phone shoppers abandon the smartphone maker. At least one survey conducted in the wake of the Note 7 recall suggests that may be happening.
Branding Band, an e-commerce company, surveyed 1,000 Samsung smartphone owners on Oct. 11 and Oct. 12, right after Samsung halted production on the Note 7 after problems with the phone's battery led to the device overheating and sparking fires. In Branding Brand's survey, 40 percent of those Samsung device owners say they won't buy another phone that company.
The news gets worse for Samsung: that 40 percent is actually an increase from the last time Branding Brand survey Samsung phone owners after the company resumed sales of the Note 7 following a mid-September recall. In that Sept. 23 survey, 34 percent of the respondents said they would not buy another phone from Samsung.
It's just one survey from one e-commerce company, but retaining customers in the wake of the Note 7 fiasco is clearly a concern for Samsung. "What assurance can Samsung provide going forward that this won't happen again?" said Ramon Llamas, research manager for wearables and mobile phones for market research firm IDC, when I asked him about the possibility of Samsung losing customer confidence. That was the challenge facing the phone maker when the incidents started occurring, Llamas said, and it continues even after the Note 7's production halt. "The only thing that's changed is the order of magnitude."
Samsung seems to recognize that customers will need some convincing to stick with its phones. The phone maker announced today (Oct. 13) that Note 7 customers exchanging their recalled device for another Samsung phone would get a $100 bill credit. Previously, Samsung had been offering a $25 gift card to Note 7 customers who stuck with its phones.
Money can help retain customers, Llamas said, but Samsung will also need to explain to customers what went wrong with the Note 7 to win back their confidence. "With each and every launch that comes out, Samsung's got to go through the steps of saying, 'Here's what happened,'" Llamas said. "There's no such thing as too much information."
Take Apple's response to problems with the iPhone 4 antenna in 2010, which resulted in then-CEO Steve Jobs holding a press conference to address the problems. "That was extremely helpful to demonstrate that Apple listened, Apple investigated and Apple revealed its findings," Llamas said. "It went a long way to alleviating concerns."
Getting back to Samsung, the risk isn't just Note 7 customers turning elsewhere for their phones. The Branding Brand survey suggests that other Samsung customers may be having second thoughts about sticking with the phone maker.
Google could stand to benefit from any wariness about sticking with Samsung, Branding Brand's survey contends. The company just announced its Pixel phone last week, and 8 percent of the survey respondents planning to drop Samsung say they'll switch to that new device. Another 62 percent plan to jump to another Android phone, while a little less than a third (30%) will switch to the iPhone.
Do you have any reservations about buying a Samsung phone in the wake of the Note 7 recall? Let us know in the forums.
Updated at 4:53 p.m. ET with analyst comment.