Samsung Suffers Its 'Worst' Drop in Smartphone Sales After Galaxy Note 7 Recall

Samsung suffered its worst decline in smartphone sales after problems with its discontinued Galaxy Note 7, according to tech research firm Gartner.

Samsung smartphone sales fell in the third quarter of 2016 by 14.2 percent year over year. This is the company’s worst performance ever, Gartner said. Samsung’s last similar poor performance in smartphone sales was in the fourth quarter of 2014 when it dropped by 12.3 percent.

The company had a good run as the quarter started, but the Galaxy Note 7’s battery issue that caused devices to catch fire led to a decline in sales of Samsung’s Note products.

"The decision to withdraw the Galaxy Note 7 was correct, but the damage to Samsung's brand will make it harder for the company to increase its smartphone sales in the short term," said Gartner Research Director Anshul Gupta.

"For Samsung, it's crucial that the Galaxy S8 launches successfully, so that partners and customers regain trust in its brand,” added Gupta.

The company apologized for the problems with the phones earlier this month and said a “careful Note 7 investigation is underway and the findings will be shared when the analysis is complete.”

“We will re-examine every aspect of the device, including all hardware, software, manufacturing and the overall battery structure. We will move as quickly as possible, but will take the time needed to get the right answers,” Samsung added.

Apple Sales Also Drop

Meanwhile, Apple’s iPhone sales continued to drop in the third quarter of 2016, declining by 6.6. Percent. In the global smartphone market, Apple accounted for 11.5 percent of it, its lowest point since the first quarter of 2009.

Apple’s iPhone 7 failed to spur buyers. The company’s sales dropped by 8.5 percent in the United States and 31 percent in China.

Chinese vendors Huawei, Oppo and BBK Communication Equipment made up 21 percent of smartphones sold to end users globally during the quarter, Gartner says. The three were the only smartphone vendors in the global top five to drive up their sales and market in the third 2016 quarter, with Huawei less than three percentage points away from Apple.