It hasn’t been a good month for Samsung (OTC:SSNLF).
The company first made headlines when it discovered a significant number of its Galaxy Note 7 devices were catching on fire when charged, due to faulty batteries. The company quickly recalled the units, vowing to customers they’d replace all models free of charge.
But that didn’t solve the problem. A number of the new phones continued to be plagued with the same problem, causing the company to pull the plug on the whole line. Customers will get their money back, with most probably swearing off Samsung products for at least a little while.
Samsung sold approximately 2.5 million of the recalled phones.
Shares of Samsung are getting hit on the Korean stock exchange. Shares are down more than 5% over the last week, and 10% off recent highs.
Investors seem to be split on the long-term ramifications for Samsung. Many feel customers will quickly forget about this, while others think it’s an indication of a big problem with quality control.
Samsung has to deal with additional competition in the high-end smartphone market. Apple is still a formidable competitor, especially after the release of its much-awaited iPhone 7. And Google has joined the fray too, coming out with the Pixel, targeted at the same market.
It’s this competition that will pose the biggest challenge to Samsung going forward. It already has a firm grip on the higher-end market. Holding onto it is another matter.
