Samsung Insiders Detail Chaotic Note 7 Recall: “Everybody Loses”

Reports of Samsung Galaxy Note 7 smartphones catching fire just don’t stop, even after the recall was officially announced. Yesterday’s report of a replaced Note 7 starting to smoke on an airplane further increases both financial and brand damages for the South Korean smartphone manufacturer.

According to Samsung, most of the fire-prone Galaxy Note 7 handsets have been recovered in major markets, including the US and its home land, but the trouble is not over. The report of the faulty replacement unit has crushed Samsung’s hopes of getting ahead of the crisis.

Since the reports of exploding Note 7 handsets emerged, Samsung has lost $16 billion in market value. The crisis seems to be worse than any the company has faced, according to a source speaking with Reuters.

“It directly impacts our products, our brand, and trust with consumers,” this person said. “If this doesn’t get fixed quickly, everybody loses,” said a second Samsung source, who didn’t want to be named due to the sensitivity of the issue, adding that as yet there was no finger-pointing at Koh or other executives.

It now depends on how the manufacturer’s mobile division chief, Koh Dong-jin, who issued a public apology last month, will handle the situation. He’s running this division for a year and previously declared himself lucky to be running Samsung’s smartphone business. But, as it turns out, his comment was somewhat hasty.

To deal with the Note 7 recall, which affects ten countries, Samsung formed a dedicated team of public relations staff in order to speed up decision-making and contain damage, according to sources:

“We share information instantly and far more widely than usual. We try to reply more promptly,” said one of them, who noted how complex it was to deal with a recall across 10 nations spread across the globe.

Samsung employees say the recall has dominated internal meetings since the Sept. 2 announcement, whether it be efforts to get the recalled phones off the streets or deal with a continued stream of claims and reports of damages or problems.

The negative publicity around the Note 7 comes at the perfect time for Apple, which has just launched the iPhone 7 and 7 Plus.