The Galaxy Note7 is in full-on product free-fall right now. Retailers are pulling it off shelves, Samsung has stopped production, and the once-deemed-"safe" versions of the phone are very obviously not. Things, frankly, could not have gone worse for Samsung. The Note7's launch has been brought to a screeching halt, and while many consumers may have been OK with Samsung's first battery fire flub given the relatively quick turnaround and response, this second round simply has no hope of retaining that goodwill.
This means Samsung will have to be walking-on-glass-covered-in-vinegar-and-angry-snakes levels of careful in how it manages what happens next. It also means it may not be clear what will happen next for Note7 owners for the next few days, or even possibly weeks in some cases. This will invariably be frustrating as customers will fruitlessly reach out to Samsung for support and receive unsatisfactory or incorrect answers. And even as Samsung's process and communications become clearer, some Note7 owners will unavoidably fall into what I'll call "restitution gaps." And this is where things will get ugly - and stay ugly for likely months to come - for Samsung.
If you bought your Note7 from a carrier, you have little to fear here in the US. They'll take it back, either for a refund or an exchange for a different device. It's possible a third round of Note7s will eventually be available for you to swap to, but I doubt Samsung knows what it wants to do in this regard yet. Even if another actually safe Note7 becomes an option, I'd still say you're better off skipping it - the phone's resale value will suffer, and you'll likely be the subject of an in-air use ban by the FAA for months to come. Those who bought full-price from an authorized Samsung retailer in their region will also probably have some kind of official recourse, even if it isn't as simple as what carriers may offer. In these cases, though, I feel confident that Samsung will likely provide total or near-total restitution to most affected customers.
But it's those people who bought from online stores that are not authorized Samsung retailers, like eBay, Swappa, or the hundreds of fly-by-night gray market electronics vendors out there, who will run into trouble. Do you think a guy operating a gray market phone business out of his garage is going to give you a refund on a phone that doesn't even have a warranty for your country? Probably not. Same goes with second-hand purchases. So, what do you do? Well, Samsung could theoretically offer a "safe" replacement device to anyone in these cases, but even that seems relatively unlikely in my opinion. The challenges become logistical - if your phone has an IMEI for a European model but you're trying to use the US recall mechanism, you may not even get far enough to get to a real person who can help you get a replacement. You could end up in a gap in the system. As for hopes of direct refunds of phones purchased this way? I doubt Samsung is going to be cutting checks. So if you don't like the solution offered to you - a new phone, assuming you can even manage that - what's your recourse?
And what about all those people who bought accessories for the phone? Used chargers, cases, and microSD cards don't exactly command a premium on the secondhand market. It seems deeply unlikely there'd ever be any official attempt to make owners whole here, not by Samsung (carriers may be another story - if you bought the stuff from them).
How many thousands of people will fall into such restitution gaps in the US alone? It's going to be significant: the Note7 is an enthusiast product, and many people have been operating under the assumption that the global-spec Exynos version is the "superior" device. Even if it comes out that Exynos versions are less or unaffected by the fire situation, their resale values will still suffer, and Samsung may end up offering an inferior level of software support if the Note7 launch is cancelled entirely in many regions. As I mentioned, you'll also have those who bought US-spec devices online, but whose sellers will no longer accept them for a refund. And of those, a great many will likely be much less enthused by the possibility of a replacement than the first recall. When something like this happens, it's very reasonable to decide you'd just like to get your money and get out. And that may not be possible.
This is where the lawyers come in. You can be certain that class action specialty firms are actively gathering data on this entire situation. There isn't a shadow of doubt in my mind that, when all the dust settles, Samsung will leave some classes of customer without any solution they find satisfactory. Product defect litigation can be extremely lucrative, and Samsung is as deep a pocket as you could ever hope to target. Public sentiment is on the side of those aggrieved here, too, given that Samsung can be said to have utterly failed customers in its first recall effort. There is clearly gross incompetence at play here.
So while the Note7 may get cancelled or replaced again, Samsung's failure will almost certainly not fade quietly into the night. No matter how competently the recall is handled, customers in gaps will emerge, and they'll be upset. More phones will catch on fire - it's an inevitability. Samsung's brand will suffer extensive damage here in the US in particular as a result, too. Anecdotes I've read from a half-dozen plus retail employees already confirm a significant group of consumers are actively avoiding Samsung smartphones of all kinds because of the Note7 fires.
To recuperate that trust, Samsung will need to go above and beyond what is required by the CPSC or their carrier partners. And I'm not sure they will.