A report from the Wall Street Journal sheds some light onto the series of events that lead to the discontinuation of the Galaxy Note 7.
According to persons familiar with the matter cited by WSJ, Samsung was too quick to decide that the root cause of the fires was in the batteries supplied by its subsidiary Samsung SDI. Samsung made this assumption based on lab analyses of defective Note 7 units showing “protrusions” in the phones’ batteries.
Based on this assumption, Samsung decided to approve the production of 2.5 million replacement devices with batteries from a different supplier, ATL. A second wave of fire incidents proved that the problem was not, in fact, with the Samsung SDI batteries, and in the end, Samsung had to kill the Note 7 to avoid further embarrassment.
Weeks later, Samsung reportedly still doesn’t know what caused the Galaxy Note 7 to catch fire.
The Wall Street Journal wrote that “Samsung’s decision to launch its own recall, bypassing the CPSC’s [U.S. Consumer Product Safety Commission] formal process for a time, may have prevented regulators from figuring out more about the root cause.”
Had Samsung confirmed the cause of the problem first, before acting, things may have turned out differently. As it stands, the repercussions of that “fatal mistake” have already been significant and Samsung only stands to lose further.
“Samsung executives have delayed the development of the Galaxy S8 device by two weeks as engineers work to get to the bottom of the Note 7’s overheating problem, according to a member of the Galaxy S8 development team,” noted theWall Street Journal, regarding the next smartphone in Samsung’s best-selling ‘Galaxy S’ series, expected launch at MWC 2016 in February.
To add to this, Samsung has already acknowledged billions of dollars in losses, and the company’s market value is down around $20 billion.
Essentially, Samsung shot itself in the foot by being so quick to act on the incomplete evidence that its SDI-produced batteries were the sole cause of the Galaxy Note 7’s problems, and the decision has blown up in its face. Now the Note 7 is dead, the development on the Galaxy S8 is threatened, and the public’s trust in the Samsung brand is shaken.