Samsung should cut its losses by amputating the Note 7

This summer, Samsung suffered the worst calamity that could befall the manufacturer of a mass market device with millions of shipments: a hardware defect serious enough to force the recall of all Galaxy Note 7 handsets. This summer. It was August when rumors of exploding Galaxy Notes started spreading and early September when Samsung reacted, but here we are a week into October and the drama still hasn’t subsided. What was originally a misfortune has turned into Samsung’s own self-harming farce.

Time to admit defeat

It’s time for Samsung to admit defeat with this permanently tainted device and move on. It should stop selling the ill-fated Note 7 and focus on making the rest of its lineup the best that it can be.

Here’s the thing that Samsung fails to understand: modern technology is so good that on the rare occasions when it fails, that news quickly grows into a meme. Antennagate with the iPhone 4. Bendgate with the iPhone 6. And now the explosive Galaxy Note. It’s testament to Samsung’s growth and maturation as a brand that it can sit alongside Apple in capturing everyone’s attention, but the Korean company is doing that in exactly the wrong way, keeping a negative spotlight on its most expensive and advanced product. Last night, even The Late Show with Stephen Colbert dedicated a segment of its opening to tease Samsung, splicing it in between talk of Elon Musk daydreaming of living in the Matrix and Donald Trump being Donald Trump.

There’s certainly something Trumpian about the way Samsung has handled the Note 7 adversity. Originally, the company was decisive and issued a global recall, but then we found out it hadn’t gone through the formal processes in the US, which might have accelerated returns and spared some of Samsung’s blushes. Then there were weird software patches that limited battery recharging to 60 percent (only in Korea) and later to 80 percent. And finally, convinced it had rectified the flaw, Samsung started issuing replacement Note 7s, one of which this week caught fire on a Southwest plane.

"Fool me once, shame on you. Fool me twice, ohmygod, my crotch is on fire."

Cue the late-night roasting from Colbert. "It’s like the old saying," says the comedian, "Fool me once, shame on you. Fool me twice, ohmygod, my crotch is on fire."

You don’t have to be a PR professional to realize how badly this is reflecting on Samsung. You don’t need to have studied marketing to know that having your phone brand specifically called out at the start of flights as horribly unsafe is likely to have a depressing effect on future sales. Only pyromaniacs, contrarians, and dedicated Note fans are actively seeking out Galaxy Note 7s at this point.

When Apple had similar, albeit much smaller, hardware issues, it swiftly shut them down. The Antennagate angst was mollified with the offer to return any offending iPhone or to use a free case. The Bendgate stuff was deflected with a press visit to Cupertino's torture-testing labs and later rectified with a tougher aluminum construction in the subsequent iPhone. Instead of drawing a clear line under its own issues, Samsung has equivocated on the best approach to take, it hasn’t used a consistent global strategy, and it’s failed to differentiate replacement Notes from the original ones in a clear and decisive way.

The Galaxy Note 7 is dead, long live the Galaxy S8

The Note 7 situation right now is that the device’s resale value is probably destroyed, even for the replacement handsets. So long as it exists, any further defects or issues with this smartphone will resurface the entire debacle and bite Samsung much harder than any other company. Phone batteries malfunction and overheat all the time, but the Note 7’s unhappy record makes it a news story every time a Samsung phone has any issues of that kind. That’s right, Samsung in general. The reputational contagion of the Note 7’s problematic battery has already spread well beyond the individual handset.

Samsung needs to consider the long-term health of its brand, and it should prioritize that over the short-term benefit of selling any further Galaxy Note 7s. The company just came out with its third-quarter financial forecast and things are looking good even with the Note 7 falling on its face. So end the disaster, take the loss, and use the time between now and the start of next year to shake off the stigma around the Samsung name. The Galaxy S8 can be a return to form from a company that had until very recently been leading the mobile pack in terms of design, engineering, and manufacturing. But to do that, it needs to be out of the Note 7’s charred shadow.