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Samsung allegedly tried to bribe man not to talk about his exploding Galaxy Note ...
As more information has surfaced about the Samsung Galaxy Note 7, the argument that the company acted swiftly and properly with its initial recall has wound up increasingly tarnished. Reports now indicate that the company performed its own internal testing while simultaneously getting in the way of what its own employees were trying to do by banning written communication on the topic. There’s another wrinkle to the story, though — one that suggests Samsung’s marketing team was trying to squelch reporting on the problem while its engineers frantically tried to find the flaw.
The New York Times reports that Zhang Sitong was saving a friends phone number in his Galaxy Note 7 when the device began to smoke and vibrate. He threw the device on the ground and began filming it — the video is embedded below.
Here’s what makes the case particularly interesting. Later that day, Mr. Zhang was contacted by Samsung employees in person who offered him both a new Note 7 and $900 in cash compensation in exchange for keeping his story quiet. Mr. Zhang refused, because Samsung had specifically reassured Chinese customers that their devices were safe while recalling hardware elsewhere across the globe. Those of you who’ve followed the story may recall that particular detail — when Samsung thought the problem was battery-specific, it said that it would be replacing hardware in other markets, but that the Chinese launch wasn’t affected. Some consumers, like Zhang, appear to have bought the device for that specific reason. “They said there was no problem with the phones in China,” Zhang told the New York Times. “That’s why I bought a Samsung. This is an issue of deception. They are cheating Chinese consumers.”
The question of how this will impact Samsung’s brand in China is not an idle one. Samsung enjoys significant market share in China and the brand is often perceived as being a luxury product. Getting stung by a problem like this isn’t going to sit well with customers. China has a reputation for cranking out counterfeit products and poor-quality tech hardware for bargain-bin pricing — but in the US, we’re relatively insulated from that trend. A country whose tech market is inundated in garbage is a market that’s going to be sensitive to manufacturers trying to push poor quality hardware, and the Times reports this is already the case. A strong position in China is vital to any smartphone company that wants to continue to succeed, and Samsung has plenty of competition in China from the likes of Lenovo, Huawei, and Xiaomi. Market reports indicate Samsung has already lost substantial market share in China, and misfires like this will only worsen the company’s performance.
In recent weeks, Samsung has been stung by leaks of an anti-union presentation that detailed how it intended to crack down on union sympathizers without falling afoul of Korean law protecting workers. It also reportedly sent memos to its staff imploring them not to leak details about the upcoming Galaxy S8; that memo was promptly leaked to the press.