Samsung could bounce back from its exploding phone fiasco faster than expected

Photo: Kim Hong-Ji/ AFP/ Getty Images.

Samsung is doing surprisingly well at holding onto customers after the Note 7’s exploding fiasco, according to a note published by UBS, though it maintained a “sell” recommendation for the company’s stock.

The research note said that customers who are returning their Galaxy Note 7 will very likely replace it with another Samsung device. And people who were planning on buying a Note 7 are also very likely to choose another Samsung phone. In both cases, the Galaxy S7 (GS7) is the most likely choice out of all other Samsung models.

The research contradicts the concern that the incident could hurt demand for Samsung’s other smartphone models, as a Nomura analyst has said in a note. Indeed, analysts and experts have said that Samsung’s bigger problem will be the long-term impact on its reputation and brand. “A company’s brand is their promise to consumers,” said John Jacobs, an expert on reputation and crisis communications at Georgetown University. “If you break that promise, you lose the customers, you lose their loyalty.”

Whilst the overall impact on its brand is yet to be seen, some customers have shown a surprising loyalty towards the Note 7, despite the risk of explosion. Shortly after Samsung confirmed it had permanently shut down production of the Note 7 earlier this month, CNET reported that some superfans were holding onto their phones.

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