Samsung Galaxy Note7 is battered, but far from dead

Mention to someone that you're carrying a Samsung Galaxy Note7 today and they will likely make a joke, usually something to do with it possibly bursting into flames.

I'm holding a second generation Galaxy Note7 right now and, yes, was a little nervous when I turned it on and off a few times. It's fine, obviously, and while no one contests that dozens of Galaxy Note7 phablets did go up in smoke, Samsung moved about as quickly as possible to stop a successful product rollout in its tracks and retrieve all the potentially dangerous devices.

Last I heard, Samsung had retrieved 60% of the devices and, shortly thereafter, launched a system update that will nag owners until they stop using and turn over their Note7's. 

The whole incident was so extraordinary that Samsung actually broke with Android convention and, on the second-generation Note7 smartphones, introduced a green battery icon instead of the Android-standard white.

The one I'm looking at has that green icon, as, according to reports, did the one that started to combust on a recent Southwest Airlines flight (it was still on the ground and everyone safely evacuated).

Just as Samsung and the Note7 were recovering, they seemingly got knocked down again. Of course, no one really knows exactly why the new phone went "poof." As I write this, Samsung is still investigating. And when I asked the company if it had reached any conclusions and could comment on the future prospects of the Note7 model, it simply sent the same response we've heard since the original Southwest Airlines incident report:

It's understandable that figuring out exactly why this new Note7 started going up in smoke isn't easy. Smartphones are complex devices. Yes, Samsung could probably very quickly discern if this was, in fact, a replacement model, but that won't tell them the why the incidents occurred. I'm certain Samsung will not release one piece of information without the other.

But as time ticks away and questions mount, Samsung can't outrun some very tough questions including: 

• Is the Note7 product brand too tainted to survive?

• Has the Samsung Mobile brand been irrevocably damaged?

• Should Samsung rename its Note7?

A recent earnings report seems to indicate that the Note7 debacle had no impact on Samsung's bottom line. Of course, that's ridiculous, since the Note7 was released at the end of the most recent quarter, which means it wouldn't have had any kind of impact. The reality is Samsung's mobile business has been struggling anyway as the chip business surges.

Throw in the towel?

Analysts I spoke to were split on what Samsung should do and if the Note7 name constitutes irredeemably damaged goods.

Much, it seems, will depend on what Samsung learns from its own investigation. Creative Strategies president Tim Bajarin told me via email that, considering the potentially negative brand impact of these original Note7 fires, it might make sense for Samsung to fast-track the Note8. That's if, of course, things go Samsung's way with the latest phone incident.

"If it is proven that a 2nd Generation Note 7 did catch fire on that plane, then I do think this branded model may not recover from this problem," said Bajarin.

Forrester Research analyst J.P. Gownder agrees that some damage has been done and he expects Samsung and Samsung Galaxy brand perception scores to take a hit.

"It takes years to build up brand equity and trust, but only one major product recall to knock a vendor down a couple of notches," he told me in an email.

However, Gownder thinks the "doomsayers" are going too far. His Forrester colleague, the company's VP and Principal Analyst Frank Gillett, told me in an email, "I realize that many pundits are ready to write off the brand and the phone, but the pundits breathe their own exhaust and overrate crises."

"It's a little early to say last rites over the Note7, until other cases of New Note7 issues surface and prove this is more than a one off," he added.

The bubble

We are, it seems, in this pregnant pause where no one really knows if there is a fundamental flaw in the Note7 design or if there was some other, plausible and less concerning reason for all that smoke.

I decided to look at the numbers to see if all that had happened since September and in the last few days had had any real impact on the Note7 handset's fortunes.

When I checked with ComScore, the analytics company found that, as of August, there were 411,000 Note7 owners in the U.S. But it had nothing to share regarding September numbers. 

Mobile analytics firm Flurry Analytics (part of Yahoo) had numbers for all Samsung Galaxy Note devices. After poring through its data Flurry Analytics found, compared to July, an 8% decline in the number of daily active users. For Samsung as a whole, it noted a 2% dip.

Localytics, a mobile engagement and insights firm, took a look at Note7 usage numbers, based on Android App (they do not specify which apps) sessions from their own customer base. They compared the first three weeks of the Galaxy Note 7's life to the last three weeks. 

The data, though obviously somewhat anecdotal, is also surprising. It shows the rapid launch rise, peaking right around the official recall, after which it nosedives until around Sept. 20, when Samsung started replacing the faulty devices. The bounce back is almost to previous levels. That data sample is, however, relatively small (but, then again, the number of Note7 devices in the field right now is probably under 2 million) and it's unlikely it accounts for repercussions from the Southwest Airline incident.

What about out in the real world, away from the smoke and numbers?

I took the Samsung Galaxy Note7 to a local AT&T store to see what employees could tell me about responses to all the controversy surrounding the device and if they thought the Note7 second generation I was carrying is still safe.

Image: LANCE ULANOFF/MASHABLE

Image: lance ulanoff/mashable

A clerk spotted me a few moments after I'd snapped this picture of the recall notice the store has placed next to all the Samsung phones.

He asked if I needed help and I told him I was curious if he thought this new Note7 was still safe. He smiled and said "we've received no emails."

I asked if he had any Note7s for sale and he shook his head, telling me they were "sold out." I pointed out that there were no Galaxy Note7 devices on display. He said that they had one there, but it was one of the potentially hazardous units. They sent it back and had yet to receive a demo unit in return.

I thanked him and he smiled again and said with a hint of dismay, "These are good phones." I nodded and exited the store.

After my visit to the AT&T store, I received this new, official statement from Samsung:

For the record, the new Samsung Galaxy Note7 with its special green battery icon continues to work just fine.