Just under a month ago, Samsung announced that it was recalling/replacing all Galaxy Note 7 phablets shipped prior to early September due to exploding batteries. Roughly two weeks later, news broke that Yahoo more than likely allowed US government agencies full access to the entire breadth of all email accounts hosted by Yahoo, while the fading tech giant was still reeling from a reported data breach and the pending sale to Verizon. Unfortunately both companies are back in the news this week and not for good reason. Samsung’s replacement Note 7s with the less explodey battery, has – you guessed it – started exploding again, even putting a customer in the hospital. This incident and at least 2 other reports of flaming phones has prompted Samsung to halt production on the Note 7, and all major US carriers will no longer sell the device. Yahoo’s troubles continue as well: the now infamous email service has suspiciously dropped the forwarding function from its service, making it more difficult for people to move to another provider. When you combine this mysterious change with the lawsuit against Yahoo’s CEO Marissa Meyer, Yahoo is looking less like a technology leader and more like a troubled company struggling to survive.
What this means for you:
Companies of this size typically have resources enough to pick themselves up and shake off these types of events. Heck, breaches are so commonplace now that most of the time consumers just shrug and carry on. Despite various widespread problems with iPhones (Antenna-gate, Bend-gate, Touch Rot) Apple still manages to sell lots of units every year. While Samsung will undoubtedly take a huge reputation hit in the mobile market, the Korean megacorp itself is so broad that it’s hard to image the Note 7 sinking the entire company. If anything the repeat failure just highlights the complex manufacturing chain that goes into producing our smartphones and will perhaps push Samsung and its competitors to look for safer, better battery solutions.
Yahoo is looking a lot less resilient than Samsung: it doesn’t have the broad product base to fall back on, and one might argue that its most valuable asset – the millions of people who still use Yahoo Mail – is in jeopardy at a time when the company can least afford it. Whether the disappearance of mail forwarding was ill-timed or carefully calculated, the long-term optics look worse than a smoking phablet. Last week’s news of Yahoo’s compromising relationship with US intelligence agencies should have been enough to encourage you to retire your Yahoo account, and their current strategy is not the Hail-Mary play they need to stay in the game.