A couple of weeks ago, I was sitting on the plane waiting to take off when the lady in the middle seat noticed that the gentleman in the aisle seat was reading his email on a Samsung smart phone. She asked him to turn it off so that the plane would not catch fire. He patiently explained to her that it was not a Note 7, so it was ok but as soon as we took off, she told the stewardess about the Samsung smart phone. The stewardess assured her that that particular phone is OK. The lady then turned towards me and said she wouldn’t buy anything that has the Samsung name on it as she was concerned that none of them have been designed properly.

The impact of the exploding Samsung Note 7, will affect more than their smart phones – their entire brand has been affected. Just like the lady on the plane, people will be suspicious of any device with the Samsung name on it using batteries. It is not just the Note 7 smart phone on the line, but also Samsung’s credibility.

In trying to address the Note 7 issues, the Samsung brand took a double hit. Not only did the Note 7 device have overheated batteries but its rushed replacement had similar issues. At the basic level, it seems it was a testing issue, neither the original nor the replacement batteries were tested thoroughly. Some of the reports attribute the battery overheating to Samsung jamming lots of features on the Note 7 to compete with the iPhone 7. That is too bad because Samsung was the poster child of innovation and great devices and had an opportunity to get ahead of the iPhone. With the decision to scrap the product line, Samsung has now lost momentum against its competitors and if that isn’t bad enough, their customers are leaving, and once betrayed, many won’t come back. Consumers are fickle. Now they feel cheated by Samsung. Class action lawsuits have been launched in Canada, Korea and the US. With all this out in the public domain, any consumer doing web research in advance of a possible Samsung purchase will be scared off buying a Samsung smartphone.

This fall, a couple of my friends after hearing about the cool Samsung features, were thinking of switching to Samsung from an iPhone and another android phone. After the Samsung recall, one stayed with the iPhone, the other one is planning to get a Google phone. Admittedly, it is a small sample, but people are leaving Samsung not just because of the quality issues but also because it has lost its “coolness” and with the additional humiliation of explaining that this is not the model that explodes. It may be too early to start talking about the slow demise of the Samsung smartphone, the same way the Blackberry went, but the battery issue and how it was handled is changing the game (the wrong way) for Samsung. IMHO, while this won’t be the death knell for Samsung, it will push it out of the leader position, leaving the Google phone and iPhone as leaders.

What can Samsung do?

It can be more transparent, disclose what their plans are, explain how they improved their testing processes and deeply discount the first large batch of smart phones to gain some of its no longer loyal customers back. And of course avoid other recalls like the one announced last week for 3 million Samsung washing machines after reports of injuries were received due to “excessive vibration”.

Samsung has to make the best of a bad situation. It is a given that the fix has to truly fix the “mistake”. At the very least this whole Samsung saga is a fascinating study to watch from afar. How will the good people at Samsung address the fact that their consumer products have been proven to be physically harmful to its user and the people around the user?

Can a large, proud company like Samsung do this? Only time will tell. Maybe they should follow the Forbes quote of the day (attributed to Tooey Courtemanche) “If you make a mistake, own it and move quickly to fix it.”

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