Samsung Galaxy Note 7 Customers Offered Galaxy S8, Galaxy Note 8 Upgrade Programme

By Reuters | Updated: 24 October 2016 15:05 IST

Samsung Electronics is offering an upgrade programme option to Galaxy Note 7 customers in South Korea who trade in their recalled device for a Galaxy S7 phone, marking its latest attempt to retain customers.

In a statement on Monday, Samsung said customers who trade in their Galaxy Note 7 phone for either a flat-screen or curved-screen version of the Galaxy S7 can trade up for a Galaxy S8 or Galaxy Note 8 smartphone launching next year through an upgrade programme.

(Also see: Samsung Galaxy S8 May Be Delayed Due to Galaxy Note 7 Investigation)

The world's top smartphone maker permanently ended Galaxy Note 7 sales due to continued reports of fire from the flagship device. In addition to offering refunds or exchanges for a Galaxy S7 smartphone, Samsung has already offered financial incentives amounting to KRW 100,000 ($88.39) to affected customers in South Korea.

Users in the upgrade programme will need to pay only half the price of a Galaxy S7 device, rather than the full amount, before exchanging to the Galaxy S8 or the Galaxy Note 8, Samsung said.

In offering the Galaxy Note 8 upgrade option, Samsung indirectly reinforced previous statements that the Note series will not be discontinued. The company said the availability of such a programme in other markets will be dependent on the situation in each country. It did not elaborate.

Samsung has stepped up marketing and promotion for its Galaxy S smartphones to try to make up for some of the lost sales. The Galaxy Note 7's collapse is already costing Samsung $5.4 billion in operating profit between the third quarter of this year and the first quarter of 2017.

(Also see: Samsung Galaxy Note 7 Still Being Used by Over a Million People Worldwide)

Some analysts say Samsung will need to offer incentives to affected customers as part of their efforts to limit long-term damage to its brand and reputation from the Galaxy Note 7's failure.

The South Korean firm is facing legal challenges from customers, as well. Harvest Law, a domestic law firm, said on Monday one of its lawyers, Peter Young-yeel Ko, and 526 others have filed a lawsuit in a South Korean court against Samsung seeking compensation of KRW 500,000 ($442.61 or roughly Rs. 29,400) per person. Samsung did not immediately comment on the suit.

The firm is also facing a proposed class action lawsuit from three Galaxy Note 7 customers in the United States.

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