The Galaxy Note 7 saga is finally over. Samsung has discontinued production and sales of the device. The company has asked customers to stop using the device and turn it off. It is sending fireproof boxes and special gloves to customers so that they can return the phones safely. The Korean company was working with carriers and retailers worldwide to put a compensation scheme in place. You can either get a full refund or swap the fire-prone Galaxy Note 7 for a Galaxy S7 or S7 Edge with a partial refund.
Was it really Samsung SDI behind the problem?
Product recalls are pretty common among consumer electronics manufacturers. Back in 2007, Nokia had asked consumers to return as many as 46 million batteries due to overheating issues. Nokia didn’t have to kill its device because the batteries were removable. Samsung too used to allow users to swap out batteries. It changed with the Galaxy S6 and Note 5 as Samsung shifted focus to a compact design.
Experts believe that Samsung could have avoided killing the Galaxy Note 7 had the phone featured removable batteries. The Korean company also seems to have misdiagnosed the original issue with its phablet. When Samsung announced the recall of 2.5 million Note 7 units, it blamed a battery cell issue for explosions.
Marathon Partners Equity Management, the equity long/short hedge fund founded in 1997, added 8.03% in the second quarter of 2021. Q2 2021 hedge fund letters, conferences and more According to a copy of the hedge fund's second-quarter investor update, which ValueWalk has been able to review, the firm returned 3.24% net in April, 0.12% in Read More
In a filing with Korean regulators, Samsung said a production fault at its sister firm Samsung SDI had caused batteries to be slightly bigger than intended. It put increased pressure on batteries when they were fitted inside the Note 7. Samsung stopped sourcing batteries from its sister firm, and the replacement devices used batteries supplied by Amperex Technology.
Now that many of the replacement Galaxy Note 7s have overheated and exploded, it raises serious questions about whether Samsung was accurate in its original explanation of the problem. If the phablets with so-called “safe” batteries were catching fire, the issue might not have been due to Samsung SDI’s batteries. According to the New York Times, engineers at Samsung tried hard to recreate the fault in the lab, but they never got the phones to explode.
What will Samsung do with millions of Galaxy Note 7 handsets?
Now a bigger question is: What will Samsung do with about four million Galaxy Note 7 units that it is getting back from customers? A Samsung spokesman declined to comment whether the company will disassemble them and use the components in other products. However, an environmental group called Friends of the Earth has urged the Korean company to act responsibly. “All the phones should be recycled at the end of their lives, or when they have to be returned due to faults,” said Friends of the Earth.
Earlier this week, Samsung slashed its third-quarter profit estimates from 7.8 trillion won to 5.2 trillion won to absorb losses caused by the Note 7 fiasco. The company has also cut its revenue estimates from 49 trillion won to 47 trillion won.