Things have gotten pretty bad at Samsung when a series of battery explosions sparked off since the launch of Galaxy Note 7 in August. Samsung’s eager ambitions to overtake Apple might have just backfired into being the root cause for their downfall. One thing for sure, Samsung has successfully launched with a BIG “BANG”! But it wasn’t quite the triumph that they hoped for or expected.
Is the company able to put out the blaze and redeem themselves from this unfortunate plight?
Insiders at the company revealed that top management at Samsung Electronics Co., pushed for features that could essentially outperform the iPhone – at last. One of it was to introduce a more powerful, faster-charging battery. This move could either make or break them as smartphone makers have been working on introducing long-lasting devices that charge faster for years. However, pushing the boundaries of technologies also increases manufacturing challenges and raises the risks of defects. Samsung adopted the first-mover advantage to introduce the Galaxy Note 7 with a 3500 milliampere hour battery compared to the iPhone 7 Plus that only has a 2900 mAh battery.
It is believed that the decision to accelerate the launch of the new Note 7 was a hasty move on Samsung’s part. Employees and suppliers of Samsung were under tremendous pressure and slept lesser with longer work hours. Suppliers mentioned that they were pushed harder and it was “particularly challenging to work with Samsung employees this time, as they repeatedly changed their minds about specs and work flow.” Proper testing did not reveal any battery problems, as so it seemed.
Without a glitch, Samsung started shipping early models of the Note 7 globally. Lo and behold, the fires began when customers started using the phones. Initially, photos and videos of charred phones were posted and circulated on the web. The situation worsened when a Jeep burst into flames after a Note 7 was set ablaze when it was placed on charge inside the vehicle. Legal lawsuits are also being filed against the company when a man from Florida suffered severe burns from his Note 7 smartphone that exploded in his front pants pocket. The FAA has since banned the usage and charging of Galaxy Note 7 on all flights.
“Please recall all Note7s and exchange them with new ones. I don’t have to get my PS.”
The exact words written by an engineer on the company’s internal online bulletin board, offering to give up his profit sharing (PS) or bonus in the midst of an internal debate between Samsung’s top managers so to whether they should carry out a full-blown recall or to take less drastic measures, like a battery replacement program.
So where did the problem lie? As officiated, it was the phone’s battery being slightly too big for its compartment and the tight space pinched the battery, causing a short circuit. Question is, how was such a huge problem being overlooked? Samsung’s race to beat Apple clearly caused a costly mistake.
On the 2nd of September, an announcement was made by D.J. Koh, phone chief of Samsung, at a press conference in Seoul to replace all 2.5 million phones shipped. But the recall drew criticisms as the company took matters in their own hands without notifying the Consumer Product Safety Commission (CPSC) before making the announcement publicly. They also did not work out how millions of consumers in 10 countries would actually get replacements. Thus, customers also received mixed signals about what they should do. Samsung’s initial advice was telling people to turn off their phones and cease usage. A few days after, the company signaled that customers could keep using the phones by offering a software patch to prevent the overheating of batteries.
The cost of Samsung’s recall is estimated to be a whopping $1.3 billion. In order to cover the costs of replacements and/or refunds, Samsung has sold shares in ASML Holding NV, Seagate Technology Plc, Rambus Inc. and Sharp Corp for a total value of about 1 trillion won ($891 million). Truth be told, the scale of the recall is unprecedented for any Smartphone makers in history.
Quality. Something that Samsung has strived so hard to uphold over the years has crumbled in a matter of days. What the company would be fighting for in the road ahead does not seem promising with having to rebuild both trust and reputation while tackling to stay ahead of the competition.