Troubled smartphone maker offers incentives in US and South Korea in bid to limit reputational damage

This article is more than 3 years old

This article is more than 3 years old

Samsung will pay Galaxy Note 7 owners to buy another brand’s smartphone, including arch rival Apple’s iPhones.

The troubled smartphone maker began offering financial incentives to US and South Korean customers for exchanging their Samsung Galaxy Note 7 phablets for a refund or another product, in an attempt to limit reputational damage in the wake of its exploding smartphones.

Samsung said on Thursday it is offering up to $100 in bill credit to consumers who exchange their Note 7s for any Samsung smartphone in the US, but will also offer $25 for those who simply take a full refund or exchange for another brand’s smartphone.

The company has commenced offering similar financial incentives in its home market of South Korea, which it says would compensate consumers for their “big inconvenience”.

Tim Baxter, Samsung Electronics America’s president and chief operating officer, said: “We appreciate the patience of our consumers, carriers and retail partners for carrying the burden during these challenging times. We are committed to doing everything we can to make this right.”

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Part of the company’s damage limitation will be an increase in marketing spend geared towards its Galaxy S7 series of smartphones, in an attempt to cushion the blow from its loss of its most expensive smartphone.

Samsung’s stumble has opened the door to rising rival Huawei, nemesis Apple and the new threat of Google’s own-brand Android Pixel smartphones.

But Samsung’s biggest problem will be the damage to its reputation. Signs within airports, announcements on planes and warnings within media have caused consumers to question not only the Note 7 series, but also other Samsung smartphones as users have failed to differentiate between the different models made by the Korean firm.