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  • Tech Industry Scandals: Does the Public Really Care?

    December 30th, 2016

    As most of you know, the Samsung Galaxy Note 7 was pulled from the marketplace because it had a battery that could overheat or burst into flame. This was — or should have been — a major story not just for the few million users of the product, but for anyone who might have considered a Samsung product.

    In retrospect, it appears that Samsung mostly did the right thing when it comes to issuing recalls. But it’s also clear the company’s engineers never got a good handle on the cause. They assumed a manufacturing defect with the battery, but even the “fixed” versions exhibited the same symptoms. So those units were also recalled, and Samsung finally got the message to take if off the market.

    Only later was an actual apology issued. At first, the information released to the public was about the problem and how to return the devices for a refund or credit towards buying something else.

    Now if that problem afflicted an iPhone or any Apple product using a battery, it would make worldwide headlines. There would be demands for investigations in the U.S. Congress and other government bodies around the world. They’d be calling for Tim Cook’s head if he didn’t provide a reasonable explanation as to what actually happened and why.

    With the Galaxy Note 7 phablet off the market, just how would that impact Samsung’s smartphone sales during the holiday quarter? Some suggested Apple would benefit “bigly,” and that might explain the high demand for the iPhone 7.

    Or maybe not.

    According to Stephen Baker, a hardware analyst for NPD Group that I interview regularly on The Tech Night Owl LIVE, it doesn’t appear that Samsung’s holiday sales were hurt at all. Sales were in line with expectations.

    Now without any surveys covering public attitudes to go by, I’m lost in speculative mode. So don’t take my conclusions seriously.

    So it may well be that the public, or at least the people who’d normally choose a Samsung, were willing to forgive the company for this mistake. After all, they did do right by customers and recall the product once the defect was confirmed. It might have been nicer to issue an apology up front rather than weeks later. But it would have been better for Samsung to work harder to isolate the problem rather than release a flawed fix that had the very same symptoms. That looked real bad.

    But I suspect that good sales were not the result of a forgiving public. I think it was more the result of most people being unaware that there was even a problem.

    Yes, there was a decent amount of coverage in the mainstream news media, and more coverage on tech sites. Cable news shows ran short reports about it, but you wonder how many people they truly reached, and whether there were regular follow-ups on the status of the defective products. Were there stories about its financial impact to Samsung’s bottom line? What about the executives who may have been responsible for this outrage?

    As I said, if Apple received a negative headline of this sort, it’s fairly certain that a large number of people would know about it. Samsung? Not so much unless the coverage was extensive. If the cable TV talking heads invited executives and tech analysts to discuss “batterygate,” perhaps there would be greater awareness.

    While I’m not a betting man, I suspect that a poll among owners of smartphones would show very little awareness of the fate of the Galaxy Note 7. Maybe power users and devoted Samsung users would have a smattering of knowledge about the situation, but otherwise no. So it’s understandable there wasn’t any discernible impact to sales. Other than a sarcastic comment during the media event where the iPhone 7 was launched, it’s not that Apple made a big deal of it.

    After all, such problems can happen to any tech company. Lithium-ion batteries do occasionally overheat in lots of products, only not as often. There have been occasional failures of that sort involving iPhones and other gear. So Apple must know it could happen to them too, and thus it was better not to make a big deal about it.

    As I said, I’m not inclined to allow for a forgiving public, just a public mostly unaware of the problem.

    That takes us to the Late 2016 MacBook Pro. The Consumer Reports review, in which these notebooks were not recommended due to alleged inconsistent battery life, was only released late in the holiday season. Even though the magazine has millions of readers, it’s not apt to have much of an immediate impact on sales. Since Apple is apparently working with the publication to find out what went wrong, it’s quite possible a fix to the test methodology, or to the Macbook Pro, will come before long, and the rating will be adjusted accordingly.

    I would be curious, though, to see a polling firm survey the results of such scandals to see how the public is reacting to them, or if they are even aware of such things. Indeed, if you look at some of the surveys, it’s frightening to discover the falsehoods that many people believe. But I’ll stay away from politics. If you’re curious, a quick search will yield some startling — sometimes frightening — results.



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