With hardware innovation plateauing and apps becoming more important than ever, it's a significant undertaking to get users to switch from the iPhone to Android ecosystem, said Llamas. Smartphone apps now account for more than half of all American's time spent online, according to a Thursday comScore report.
"All your applications, content, all that you had on your previous Note devices — they don't transfer easily to an iPhone, and only some may transfer to other Android smartphones," he said.
By acting swiftly, Samsung may have time to fix and replace its smartphones in time for the holiday season sales spike, Newman said. It could blow over the way Apple's Maps glitches or "bendgate" did.
Still, not everyone is so sure. Nomura research analysts CW Chung and Chris Chang wrote that Samsung could have had a better follow-up strategy which could prevent brand-loyal consumers from changing their minds, like a Gear S3 giveaway.
Samsung also faces a squeeze as Apple threatens its high end market, and Android makers like Lenovo, Motorola, LG and HTC undercut its price, said Forrester analyst Frank Gillett.
"Having the talk about, 'Oops, there's a battery problem,' is a step in the wrong direction," Gillett said. "The biggest concern is they have to pivot the conversation to software and services."
As both Apple and Samsung face their challenges, there could be an opportunity for a dark horse to enter the race, too, Newman said. While Apple and Samsung are still top smartphone vendors by volume, their shipments are growing much more slowly worldwide than upstarts like Oppo, Xiaomi, Vivo and Huawei, according to IDC.
Indeed, many vendors now offer physical features like big screens and adequate processors, including $100 phones offered in emerging markets by players like Oppo, Xiaomi, Vivo and Huawei that come loaded with locally-important apps, Llamas said.
But far fewer offer the Note's private file system, Llamas said, or Apple's curated app store, said Newman.
"It's about changing the conversation," Gillett. "Are they in a commodity race to the bottom competing with the leading Chinese makers on price? Or can they carve out a role to themselves with services?"