Samsung at CES: Ignore that burning Galaxy Note 7 over there

CES marks the first big event for Samsung following the Galaxy Note 7 debacle. How will it respond?

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
5 min read

Samsung has been lying low this holiday season.

And for good reason. You'd want to keep your head down, too, if the year ended as poorly for you as it did for Samsung.

The Galaxy Note 7, one of its most high-profile phones, blew up in its face, suffering multiple recalls and bans by airlines before only now flickering out with a final "death update" that essentially bricks the remaining units in the wild. Then there was the recall of a defective washing machine, throwing into question the safety of its entire product lineup.

It's a startling spiral down for a company that was riding so high after the critically lauded Galaxy S7 and S7 Edge. The Note 7, which won its own positive reviews, was supposed to capitalize on the momentum and put Apple back on its heels.

For Samsung, 2017 can't come soon enough. But the very first week of the new year brings CES, which marks the first public event for the Korean electronics titan since the Note 7 debacle. Under the bright lights of the massive gadgets exposition, it typically focuses on TVs, home appliances and other big electronics, but its phone failure is sure to be the elephant in the room.

Watch this: Samsung's Note 7 refuses to die on Verizon

"Even if they don't say anything, on any flight that most people would be taking into Las Vegas, they would be reminded about this issue with the hardware," said Reticle Research analyst Ross Rubin. "It will be fresh in people's minds."

Answers wanted

Samsung's main task in 2017 is to convince consumers to trust it again. If one of its most important devices could have fatal problems, what does that say about everything else it makes?

First on Samsung's agenda is figuring out what happened -- and communicating that openly to consumers. It originally tied the Note 7's overheating to a battery flaw, but the second recall showed it was something more.

Samsung has said it's working with a third-party investigator to figure out what caused the phones' thermal problems. As of now, it still doesn't know.

You know what would be a great place to clear the air? CES, the world's largest consumer electronics show.

"Samsung has to reassure customers that it knows what happened ... and that it's taking steps to address it," Current Analysis analyst Avi Greengart said. "So far, we haven't gotten that message from them."

The company, of course, may choose to ignore the issue entirely and focus on its new products. But that would be a mistake -- especially if it hasn't said something in the days before the show about what caused the Note problems.

Samsung said in a statement:

"We are working to identify and address what went wrong as quickly as possible, and as part of the investigation we're re-visiting every step of our engineering, manufacturing and quality control processes, in partnership with independent third-party experts. This investigation has been thorough, and will take time. We take very seriously our responsibility to understand the core issue and once the analysis is complete, to communicate our findings transparently, definitively and quickly."

Bouncing back

A consumer survey from Reuters suggests Samsung's reputation will make it past the Note 7 debacle just fine. And the "majority" of the 93 percent of US Note 7 owners who turned in the device opted for a different Samsung phone in return, the company said this month.

But MAi Research and Luminoso, an artificial intelligence-based analytics company that spun out of the MIT Media Lab, found in a survey exclusively provided to CNET that while overall likability of Samsung's brand declined only slightly from February 2016 to October 2016 (78 percent to 74 percent), consumer intent to purchase a device dropped "at a statistically significant level for every Samsung product line with the exception of its fitness bands." In the case of phones, only 59 percent of people surveyed would buy a device in the next six months, down from 68 percent in February.

Creative Strategies said in October that more than a quarter of Android owners it surveyed in the US have a more negative opinion of Samsung following the Note 7 issues. Current Samsung device owners haven't seen their opinion change as much, but for people who don't already have a Samsung device, that percentage is "much higher," the research firm said.

Enlarge Image

The Note 7 had problems that caused some devices to explode.


Given how competitive the high-end smartphone market is, Samsung will need to steal customers away from other handset vendors. But the data suggests it may struggle with that.

The company said in a statement that "through this difficult process we have been, and will continue to listen to our customers, learn, and work to renew trust and confidence in our brand and our products. This is our top priority."

For Samsung to really turn things around, it needs to wow people with its next flagship phone and to step up its game with upcoming devices in general. Many reviewers believed it had found the winning combination in the Note 7 -- sleek design, water resistance and new features like an iris scanner. Now Samsung needs to build on that with the Galaxy S8, but without the exploding bit.

It needs better voice controls and a virtual assistant, something it could gain from its recent acquisition of artificial intelligence startup Viv Labs.

Even more than any single phone, Samsung needs to take a look at its entire lineup and find opportunities to woo buyers. It has been a leader in virtual reality through its partnership with Facebook's Oculus, and this could be the time to improve its VR headset or figure out what to do in augmented reality. (Just think of the popularity of Pokemon Go, an AR game that overlays a digital world on top of the real world.)

And Samsung needs to make its devices work together better, something that seems to be an eternal problem for the company. It owns all of the pieces of electronics puzzle: TVs, home appliances, mobile devices. Now it needs to put them together.

The first evidence of that could come in early January at CES.