Note7 Stopping the market position of Samsung is difficult to protect who will be on the top?

At the beginning of 2016, Samsung Electronics CEO Wu Wuyi made a “difficult” judgment for Samsung Electronics in 2016. The fateful Galaxy Note7 phone obviously makes this harder and more serious.

On October 13, the Note7 phone was recalled twice in the US market. Two days ago, it was announced by Samsung Electronics that it would stop selling globally, and 190,000 National Bank Note7 phones that were not included in the first round of recalls were also announced on the same day.

Note 7 mobile phone's "short-lived" has allowed Samsung Electronics to cut operating profit in the third quarter of 2016 by more than 30%. But more crucially, Samsung, whose brand image is seriously damaged, stopped to look at its time.

First recall of the national machine

After the Note7 mobile phone recalled for more than a month in the world, the National Bank version of the Note7 mobile phone has finally entered the recall.

On October 11, China's Samsung Electronics announced that it has decided to stop selling the National Bank Note7 products in mainland China and recall all the National Bank Notes7 products sold in mainland China.

According to the information disclosed by the official website of the AQSIQ on the same day, Samsung (China) Investment Co., Ltd. filed a recall plan with the Law Enforcement and Inspection Department of the AQSIQ for investigation and initiation of the defect investigation, which was decided since October 2016. On the 11th, all SM-N9300 Galaxy Note7 digital mobile phones sold in mainland China were recalled, totaling 190,984 (including 1858 products that were first recalled on September 14, 2016).

The reason for the recall is that due to the abnormal heat and burning problems of the products within the scope of this recall, serious consequences such as fire may occur.

China's Samsung Electronics has announced that the Note7 handsets officially released in the Chinese market since September 1 have adopted different battery suppliers, so they are not in the replacement category. However, the information disclosed by the General Administration of Quality Supervision, Inspection and Quarantine shows that as of now, there have been 20 overheating and burning accidents in the Note7 mobile phone in mainland China. The above information also shows that in addition to stopping sales, Samsung China has stopped producing Galaxy Note7 mobile phones since October 10, 2016.

China's Samsung Electronics said in a statement on October 11 that it has actively communicated with relevant government departments on specific recall measures such as returning or replacing other products of the Banknote version of Note7 products.

Samsung China released the latest announcement on the afternoon of October 14th, consumers who choose to return Galaxy Note7 will have a subsidy of 200 yuan; consumers who choose to purchase Galaxy S7 edge/S7 after returning will receive a subsidy of 600 yuan (including a return subsidy of 200 yuan); In addition, the specific accessory products need to be returned to the original purchase route.

The major channels have already taken action. According to the "China Times" reporter, Jingdong has sent a reminder message to customers who bought Note7, and Gome and Suning also issued a notice to recall the Note7 mobile phone. Gome said in the notice that it will refund the purchase amount of the Note7 mobile phone to the consumer in full, and recycle the mobile phone.

Shortest life flagship

The suspension and recall of the Chinese market is only a partial depiction of Note7's many setbacks. The bigger tragic fate of this phone is that it has been struggling for more than a month and has not saved its fate of stopping sales around the world. In a way, this declares the end of the Note7 phone.

On October 11th, Samsung announced in a statement released by its global official website that Samsung is currently cooperating with the regulatory authorities to investigate the recent incident report. During the investigation, Samsung will ask global operators and cooperative dealers to stop sales of Galaxy Note7 mobile phones. With replacement. Samsung also recommends that users of Note7 phones remain powered off and stop using them.

The reason for the new version of mobile phones to stop selling is still the old problems of abnormal heat and burning.

According to the "China Times" reporter, after the large-scale recall of the old version of the Note7 mobile phone, the new version of the Note7 mobile phone, which is considered "safe", has appeared in the US market with several batteries overheating leading to spontaneous combustion or explosion. US telecom operators AT&T and T-Mobile have previously announced that they will stop replacing Note7 phones with consumers. Whether or not to sell in the future depends on the results of the battery failure investigation.

The latest news shows that Note7 phones were recalled twice in the US market.

On October 13, the US Consumer Product Safety Commission (CPSC) and Samsung Electronics announced that they would recall all Samsung Galaxy Note7 products sold in the United States, totaling 1.9 million. The announcement issued by CPSC shows that Samsung has received 96 reports of overheating of Note7 batteries in the US market. Among them, 23 accidents occurred after the first round of recall announcement was issued on September 15.

Replacing the new battery obviously did not solve the security problems encountered with the Note7 phone.

On September 2, Samsung announced for the first time that the Note7 mobile phone that has just been on the market has battery defects. There have been 35 spontaneous combustion or explosions of the battery, which has announced the recall of 2.5 million mobile phones sold in 10 markets around the world. The battery produced by Samsung's SDI was considered to be responsible for this, while the battery produced by another battery supplier, ATL, was considered safe.

IDD China terminal system research manager Jin Di told the China Times reporter that Note7 originally thought it was a problem with mobile phone batteries, but the analysis from the current situation is because the overall system research and development is not cautious.

Samsung obviously does not plan to spend more time on "fixing" Note7.

On October 13, foreign media reported that Samsung plans to completely dispose of all recalled Note 7 phones, and does not intend to repair or refurbish. Jin Di also analyzed the "China Times" reporter, saying that Samsung will not re-improve the development of Note7, it is too late. And there will be no channel vendors willing to work with Samsung to improve Note7, because the terminal is no longer needed.

Third quarter profit forecast is lowered by 30%

Note7's global suspension has quickly spread to Samsung Electronics' performance.

On October 12, Samsung Electronics announced an adjustment to its third-quarter earnings forecast. In addition to lowering the previously expected operating profit of 7.8 trillion won (about 7 billion U.S. dollars) by more than 30%, the income has also been lowered by 2 trillion won. Just five days ago, Samsung Electronics was also optimistic that its current operating profit will increase by 5.6% year-on-year.

On October 11th, the announcement of the global suspension of sales, Samsung Electronics stocks suffered a sharp decline in the opening, the stock price fell 8.04%, the largest decline since 2008.

The performance of Samsung mobile phones in 2015 is not satisfactory. According to the financial report, Samsung's mobile division revenue reached 103.55 trillion won in 2015, down 7.3% from the same period of the previous year. The operating profit was 10.14 trillion won and the income profit fell by 30%.

Grab the Note7 that was released before Apple released the iPhone7, which was originally seen by Samsung Electronics as the key to improving this year's performance. But now, not only is Apple’s expectations frustrated, but this year’s performance will also be hit hard.

Nomura Securities analysis, assuming Samsung has made 4 million Galaxy Note7, Samsung will only clean up the cost of 1.6 trillion won (about 1.43 billion US dollars) in the fourth quarter. When Samsung announced the first round of recalls, South Korean analysts expected Samsung to spend 1 trillion won (about 884 million US dollars).

Samsung Electronics has been aggressively selling its non-core assets.

On the morning of September 18, Samsung Electronics announced that it has sold half of its ASML shares, 4.2% of Seagate shares, 0.7% of Sharp shares and 4.5% of Rambus shares. Earlier, Samsung sold its printer business to HP. According to a rough estimate by the China Times reporter, these assets brought about 15 billion yuan (about 2.23 billion US dollars) in revenue to Samsung.

The loss of Note7 also caused Samsung's market share to be lost. Jin Di told the China Times reporter that the fermentation of Samsung Note7 crisis will allow Apple to steal some of its market share in the high-end market, and domestic mobile phone manufacturers such as Huawei and OPPO will also have good opportunities.

According to IDC's survey data, global smartphone shipments in the second quarter of 2016 were approximately 342 million units, of which Samsung ranked first with 22% market share, and second Apple's market share was about half of Samsung's. Huawei, OPPO and vivo, which are closely followed by domestic mobile phone manufacturers, have a close share with Samsung.

In the 2016 China's second quarter smartphone market data released by IDC, Samsung failed to enter the top five. The fifth Apple market share is only 7.8%.

Samsung's next mobile phone is the S8 that will be released in February next year. But the early end of the Note7 mobile phone is clearly a lot of uncertainty for the S8 to turn the tide in the next year.