Thursday, October 13, 2016

Samsung's Battery Problem May Go Much Deeper Than The Galaxy Note 7

Now that Samsung Electronics has formally discontinued production of the company's Galaxy Note7 smartphone, which has been plagued by battery problems that caused fires and even explosions, one may wonder what is next for the world's largest cell phone provider. Well unfortunately things aren't looking good at this point!

All indications and reports conclude that as of right now Samsung still has no idea exactly what was causing the issues to begin with, and that they may have made the matter worse by incorrectly assuming it was merely an issue with the batteries used in the Note7.

According to The New York Times, Samsung tasked hundreds of its own engineers and employees to figure out why the smartphone battery was suddenly exploding. Unfortunately it appears as though the employees were unable to replicate the exact issue forcing the company to conclude that it must have been because of faulty batteries coming from Samsung SDI. This in-turn led the company to issue their initial recall with the company deciding to continue shipping new Galaxy Note 7s containing batteries from a different supplier.

As we now know this further compounded the issue as reports soon surfaced that some of the replacement devices were blowing up too. The New York Times spoke with a person briefed on the test process who says company engineers went back to the drawing board and that as of this week Samsung’s testers were still unable to reproduce the explosions.

The life of the Note7 was short. Sales first began in the U.S. on Aug. 19. Samsung recalled 2.5 million Note7s globally on Sept. 2, with a formal U.S Consumer Product Safety Commission recall on Sept. 15. Then, on Oct. 5, an apparently recalled Note7 began billowing smoke aboard a parked Southwest Airlines jet. The plane was evacuated; no one was injured. When more reports came in of recalled Note7s in recent days, several U.S. carriers decided to halt sales and exchanges. 

Samsung has received at least 92 reports of Note 7 batteries overheating in the United States, with 26 reports of burns and 55 reports of property damage, according to information posted by the United States Consumer Product Safety Commission.

Whether or not Samsung actually knows what the problem is the question will be can they actually fix it. Many industry pundits are speculating that Samsung's battle with Apple, and their desire to pack as much innovation and power into a device as they can, could have been the root cause of the devices overheating. Samsung, and many other Android manufactures have had a long history of devices heating up and overheating, so this isn't new. The problem is that we may have reached a point now that the tech these manufactures are using it just too much for the small devices to handle.

This creates an issue for Samsung going forward. The Galaxy Note7 may have just been the tip of the iceberg. If they don't figure out the issue, and can't resolve it, then they may have to reign in and possibly even delay production of a Samsung Galaxy S8 (their next purported release) and may have to discontinue the Note line-up (for now at least), until they can get it resolved. Of course this all comes at a critical time for Samsung, and Android for that matter, as we have seen signs of the smartphone market slowing and Samsung in particular facing tougher and tougher competition.

The one up-side here is that Samsung has numerous devices on the market right now that have had no issues. The downside is that the Note series is generally the top-tier and showcases much of what we should see (power and specs wise) in the coming 2017 Galaxy models.

DJ Koh, Samsung Mobile’s chief, has today pledged to restore consumer faith in the Samsung brand following the discontinuation of the Galaxy Note 7. Mr Koh said that he would “at any cost find the exact cause (of the faulty Galaxy Note 7) to restore [the] trust of consumers so that they can use Samsung products without any safety concerns,” reports The Korea Herald.

Analysts have pegged the overall cost to Samsung at $5 billion to $7.5 billion, not including the hard-to-estimate impact on the Samsung brand. Some analysts, including Credit Suisse, said the lost sales on up to 19 million Note7 phones is about $17 billion. Samsung themselves recently cut Q3 profit estimates by $2.4 billion, and its Q3 revenue estimates by $2.2 billion.

How severe do you think the aftershocks will be for Samsung? Is this the end of the Note brand?

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