The reason behind Samsung permanently discontinuing the Galaxy Note 7

When numerous Samsung Galaxy Note 7 smartphones instinctively exploded in August 2016, the South Korean company went into overdrive, urging its employees to diagnose the issue.

Initially, Samsung’s engineers concluded that the defect was caused by faulty batteries from a supplier. In September 2016, Samsung announced a recall of the Note 7 devices, but continued to ship the smartphones containing batteries from a different supplier.

However, its solution failed after reports began to surface that the replacement phones were also catching fire. When Samsung’s engineers looked further into the problem, they were unable to reproduce the explosions, and by then it was too late.

The company ultimately made the decision to kill the Galaxy Note 7 entirely. Such a drastic move is uncommon in the technology industry. Rather, companies work to improve a product instead of pulling it off the market altogether.

Samsung received at least 92 reports of Note 7 batteries overheating in the United Stated, with 26 of them reporting burns and 55 noting property damage, according to the United Stated Consumer Product Safety Commission. The agency is also working on a potential second recall of the Note 7 replacement devices.

“The fact that we are dealing with potentially a second recall on top of a first recall is not your normal situation and indicative of a less-than-ideal process that should have involved earlier coordination with the government,” Elliot F. Kaye, chairman of the safety commission, said.

And the damage has been severe for Samsung. Before the company announced discontinuing production of the Galaxy Note 7, its South Korea-traded shares fell more than 8 percent, making it the largest daily drop since 2008 and reducing its market value by $17 billion.

How quickly Samsung will emerge from the Note 7 disaster is still unclear. The company is facing a substantial financial blow that may be hard to recover from.

“The problem seems to be far more complex,” said Park Chul-wan, former director of the Center for Advanced Batteries at the Korea Electronics Technology Institute. “The Note 7 had more features and was more complex than any other phone manufactured. In a race to surpass iPhone, Samsung seems to have packed it with so much innovation it became uncontrollable.”

Source: NYT