Samsung delays Galaxy Note 7 again; Apple set to cash in on first festive rush
NEW DELHI/KOLKATA: Samsung will further delay the launch of its latest flagship Galaxy Note 7 smartphone in India, giving its biggest competitor Apple a free run in the first few weeks of the festive season, three senior industry executives said.
The decision to postpone the India launch of the Note 7, which has been plagued with overheating battery problems, was taken by the company on Wednesday.
Samsung wants to first ensure that the 2.5 million devices already sold globally are recalled, said the executives, who requested anonymity. The company then plans to relaunch the devices in the key markets of South Korea, Australia, Singapore and the US.
Samsung India planned to launch the Note 7 in the last week of September and then delayed it to around the same date as the iPhone7. “But now it is hoping to launch just before Diwali,” said a person aware of the development, asking not to be identified.
Another executive said the launch may be delayed further, possibly beyond Diwali, if Samsung fails to relaunch the device elsewhere as planned. Samsung is said to have postponed the launch of the new Note 7 in South Korea from the last week of September. The company said it has received about 60% of the affected phones sold in the US and Korea.
The electronics giant based in Suwon, South Korea, recalled the smartphone globally on September 2 after reports that several devices caught fire due to overheating batteries. The development was a setback for Samsung, which brought out the new flagship model early, hoping to get a headstart over Apple, which will start selling the new iPhone in India on October 7. Samsung started selling Note 7 in the US on August 19.
An email sent to Samsung India did not elicit any response till press time. In India, the company is gearing up to ensure adequate supplies of batteries from a new vendor, since the Note 7 devices will be made locally.
“If Samsung delays it for long, they will lose out on customer acquisition since the replacement rate for premium handsets is now 2-3 years,” said Tarun Pathak, a senior analyst with Hong Kong-based Counterpoint Technology Market Research. There was an instance of the Note 7 bursting into flames in China as recently as Monday, according to news reports.
“A massive consumer trust campaign is also planned, which will debut a couple of weeks before the launch of the Note 7 in India. Samsung was trying all out to launch the new Note 7 before the iPhone 7 launch so that it does not lose out much on the festival sales, but the plans have failed,” one executive said.
GAIN FOR APPLE
According to Counterpoint Research, Apple sold 850,000 iPhones in the October-December period last year and it is expected to sell about 1million units this year due to the delay in the launch of Samsung’s Note 7. Apple had edged past Samsung in the festive quarter in the past couple of years, according to some market research firms.
The October-December quarter is the most crucial for smartphone makers and accounts for more than 40% of their annual sales. The festive season is when Samsung and Apple launch their latest phones, competing in the premium segment.
Consumers typically upgrade their handsets during this time and manufacturers expect robust demand this year on the back of recent salary increases of central government employees.
“However, Apple is also facing a global shortage of supply of the iPhone 7. But this is an opportunity for Apple since Indian consumers shift easily between the two brands when a compelling new handset comes,” said the chief executive officer of a leading mobile phone retailer, asking not to identified.
Samsung continued to lead the Indian smartphone market with a 25.1% share in the three months ended June, according to International Data Corporation.