IDC Surveys on Note 7 Impact

Results from a recent IDC survey, U.S. Smartphone Owners’ Reaction to Samsung Galaxy Note 7 Recall show that Samsung faces some short-term challenges but nothing that will darken its long-term prospects.

IDC surveyed 1,082 U.S. consumers through an online survey on October 17th and 18th, four days after Samsung decided to halt production on the Note 7. The survey focused on three groups of consumers: current Samsung smartphone owners (507), past Samsung smartphone owners (347), and smartphone owners who have never owned the Samsung brand (228). Due to the limited installed base, just 24 Note 7 users were captured in the survey; as such, data in those questions should be viewed as directional only.

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“As challenging as the Note 7 recall has been for Samsung, the data in this survey indicate that most consumers are unaffected by this, which should be good news for Samsung,” said Ramon T. Llamas, research manager, Wearables and Mobile Phones. “For the minority of Samsung customers who are unlikely to purchase a Samsung smartphone in the future, the company has to win back consumer trust. Thus far Samsung has offered monetary incentives but, at the heart of the matter, consumers want to learn the root causes of the problem and how Samsung intends to fix them.”

Some key results from the survey include:

  • Half of the 24 Note 7 owners polled said they have or will choose an Apple iPhone to replace their recalled phone, while 17% said they would choose another Samsung. Most said they will return their phone through a carrier’s physical store.
  • The Note 7 recall doesn’t appear to be harming the broader Samsung brand so far. A majority of respondents said it would not impact future decisions to buy other, non-smartphone Samsung products such as televisions and appliances.
  • Survey participants’ view of Samsung’s response to the Note 7 recall was largely neutral to positive; surprisingly about 13% hadn’t heard about the recall when polled.

“The Note 7 recall along with all its repercussions, represents a significant event in the world of consumer electronics,” said Anthony Scarsella, research manager, Mobile Phones. “Although the recall may have an adverse impact on the brand in the short term, the truth is that Samsung remains the clear market leader in the worldwide smartphone market. Moving forward, Samsung will need to put the Note 7 to rest as quickly as possible and focus all efforts on producing a stellar Galaxy S8 come next spring. If successful, consumers will quickly forget the Note 7 fiasco if the upcoming S8 can deliver on all fronts.”

Analyst Comment

Just as we went to press with this report we saw that Samsung has recalled 2.8 million washing machines in the US. The recall will affect 34 models of washing machines, about 2.8m machines in total, sold since 2011. Customers can either have a free repair and one-year warranty, an exchange rebate on a new washing machine (with “loyalty incentive up to $150”) for a Samsung purchase), or a full refund for eligible new customers. That could add to concerns that Samsung has a systemic problem with quality. (BR)