Mr. Park, a 43-year-old office worker, did not exchange his Galaxy Note7 when Samsung Electronics first announced its recall in September. He didn’t have the time.
To get a new phone, he had to call a service center to request an exchange, then visit a store or send his Note7 via courier or the postal service. “The process seemed complicated and with my current workload, I simply didn’t have the time to do all that,” said Park.
Aside from the hassles, Park is very satisfied with the Note7 and its state-of-the-art functions and isn’t overly worried about his catching fire.
“I might buy the Galaxy S8 that is supposed to be released next year,” he said. “But before then, I don’t really want to downgrade.”
Mr. Kim, a 48 year-old Note7 buyer, was forced to wait an hour in line to exchange his original model for a new, supposedly safe model in mid-September. Samsung wants him to come back and surrender the Note7 for another product.
“I’m not willing to go through that again,” said Kim. “The phone isn’t bad at all in terms of functions, so I just decided to keep it.”
Samsung Electronics stopped Note7 productions on Oct. 11 because a number of them burned up or exploded. It has told customers to exchange them for safer phones. Refund and exchanges started in Korea last Thursday.
But many customers are holding back. So far, according to mobile service providers, less than 10 percent of Note7 users have turned in their Note7s for refunds or exchanges. Worldwide, over one million users are still using the product.
“There’s a high possibility that current Note7 owners are early adapters who prioritize new functions, considering the fact that they bought the product almost as soon as it was released in August,” said Choi Soon-hwa, professor of international business at Dongduk Women’s University. “They might even think the Note7’s new features are more important than safety issues.”
The deadline for refunds or exchanges is Dec. 3, both in Korea and internationally.
Holding onto a Note7 has one obvious risk: it may be one of the units that melts down. But there are other disadvantages too.
Traveling with a Note7 is already difficult, if not against the law: over 10 international airlines, including Japan Airlines and Singapore Airlines, have prohibited passengers from taking Note7s inside their planes.
The restrictions are even tighter on American airlines. The Federal Aviation Administration, a U.S. national organization that sets regulations for airports and airlines, announced last Sunday that carrying a Note7 on board will be regarded as a criminal act.
If caught, an owner will be liable for a fine of up to $179,933. If a passenger tries to sneak it on the plane, he or she could be sentenced to a maximum of ten years in jail.
Another problem is after-sales service. Now that production has been halted, repairs that require components will be difficult next year. Samsung is unlikely to be doing software upgrades for a discontinued product.
“In the longer term, uncollected Note7 models might turn out to be a real problem for Samsung Electronics, as each meltdown or explosion in the future will be another blow to the company’s image,” said Song Dong-hyun, CEO of Minglespoon, a start-up that provides consulting on online crisis management.
“To completely eliminate this possibility, it would be better for Samsung to encourage refunds and exchanges.”