Overall Crisis
Amid controversy over the outbreak of fire on batteries of the Galaxy Note 7, Samsung Electronics put a temporary hold on production of even the new Galaxy Note 7 units which the smartphone giant had rolled out in order to remove worries over its batteries’ catching fire.
Further, the Korean major mobile carriers such as SK Telecom, KT and LG U+ have stopped the sales of Galaxy Note 7 according to recommendations by Samsung Electronics and the Korean Agency for Technology and Standards.
According to partners of Samsung Electronics on October 10, controversy over fire related to new Galaxy Note 7 units in the US and Taiwan prompted Samsung Electronics to temporarily suspend production of new units that Samsung Electronics had produced to replace old unit and sell at Korean and Vietnamese factories among others after a recall of all old units.
Samsung Electronics is planning to decide whether to resume production or not after checking the results of an investigation into the report of the first case where the new product burst into flames by the US Consumer Product Safety Commission (CPSC). AT&T and T-Mobile, leading mobile carriers in the US are waiting for the results of the investigation after temporarily stopping replacing old units of the Galaxy Note 7 with new ones recently. The CPSC is looking into a recent case where the Galaxy Note 7 caught fire in an airplane at Kentucky’s Louisville International Airport in the US. The results of the investigation are due out this week.
Up to the present, a total of eight cases where new products caught fire have been reported. Among them, with respect to one case that happened in Korea, the Korea Technology Laboratory (KTL) came to a conclusion that the fire was triggered not by a flaw in the product but by external shocks. The Korean Agency for Technology and Standards is additionally looking into the safety of the new Galaxy Note 7 as reports of such cases were made at home and abroad. On the other hand, in the US, there is a delay in an announcement of the results of investigations or a consumer who claimed that the new Galaxy Note 7 burst into flames is refusing to hand over the product in question.
It is said that Samsung Electronics is discussing making a recall again or even giving up the Galaxy Note 7 business and permanently stopping production and the sale of the smartphone if they find a flaw in the new product.
But some analysts say that the shutdown of the Galaxy Note 7 business will result in astronomical opportunity cost so the shutdown of the business is quite a hard choice to make.
But some telecommunication industry experts say that it is difficult to rule out a possibility that Samsung Electronics will choose to give up the Galaxy Note 7 business despite huge loss by taking into consideration whether or not mobile service carriers will cooperate with Samsung Electronics and a recovery of consumers’ trust in Samsung Electronics.
“Even though there is no strong evidence for a flaw in the new product yet, if a flow is found and another recall is made, will consumers buy the product that recalled twice?” said an executive in the telecommunication industry. “We at mobile service carriers will not favor a re-recall as it will be unprecedented and risk burdening cost and tarnishing our reputations among customers.”
If Samsung Electronics acknowledges a flow in the new product, the cause of the flow may give rise to a huge blow. First of all, if it is found that the battery production process is faulty, it will affect not only Samsung Electronics but major smartphone makers including Apple around the world. Why? All of batteries used in new Galaxy Note 7 units were produced by ATL in China. ATL is supplying batteries to other smartphone companies including Apple.
On the other hand, if the culprit behind such cases is not the battery production process but defective hardware and software of Samsung or a flaw in Samsung’s battery design, Samsung will have to bear all responsibility for that. “Battery experts will hardly say that the battery problem is blamed on other matters except for a flow in batteries,” said a representative of the Korean Agency for Technology and Standards.
Samsung Electronics also announced that not a design problem but a problem in the battery production process caused batteries to catch fire during the announcement of the first recall last month.
Earlier, Samsung Electronics pointed the finger at a contact between anode materials and cathode materials between thin separators inside Samsung SDI batteries used in the early versions of the Galaxy Note 7 as the cause of the problem. According to Samsung Electronics, a thin separator divides the cathode and anode in a lithium-ion battery. As the separator was made to be ultra-thin, the cathode and anode meet each other, creating over-current and finally resulting in fire or explosion,
In particular, the use of flexible pouch-type internal batteries instead of separable batteries can decrease the size of a smartphone and raise elevate energy density and make dust-proof and water-proof designs possible, giving designers a lot of advantages in their design work. But on the dark side, it can make batteries more vulnerable to external shocks or heat. It is necessary to design a smartphone after taking into account such factors. Thus, some experts raised a possibility that Samsung Electronics ignored such factors and focused on boosting smartphones’ performances only while beginning to change designs of its smartphones into battery-integrated models last year
Samsung recently began to sell new Galaxy Note 7 units loaded not with Samsung SDI batteries but with ATL batteries, saying that ATL batteries were safe. But if the same problem occurs to ATL batteries, too, it will open up a possibility that basically, not parts but the product itself will be to blame. When early cases took place, some experts analyzed that there could be problems in the USB-C port first introduced to the Galaxy Note 7 and high-speed charging or its external body which is surrounded with glass and aluminum and is susceptible to shocks.
They also brought up a possibility that Samsung Electronics failed to control the quality of the Galaxy Note 7 during its hasty process to product the new product to replace old units. “Without taking a look at the real product, it is quite a big challenge to judge whether or not those accidents are blamed on batteries or hardware,” said Cho Jae-pil, a professor of energy and chemical engineering at the UNIST.
There could be a possibility of a problem in quality control, professor Cho explained. “Nobody knows what the problem is yet,” professor Cho stressed. “ATL must have had difficulties in responding to a big order in a short period.” The company may have had hard times, checking the quality of all batteries,” he added.
At present, it is impossible to confirm whether or not there is a flow in the product itself. But the possibility cannot be ruled out that the results of the CPSC’s investigation may lead to a second recall. This is because if the product is found faulty, governments of nations such as Korea, the US and China among others may make a recall of new Galaxy Note 7 units.
Needless to say, there is still a possibility that those accidents will be attributable not to a flaw in the product itself but to external factors and black consumers who want to make money by lying.
In fact, before and after the recall of the Galaxy Note 7, fake reports were made one after another around the world. Up to now, about 60 reports were proved clear fakes and about the half of them were made in the US market. Some industry watchers say that such fake reports may aim to prolong the Galaxy Note 7 battery issue and fuel consumers’ worries over the smartphone for fear of an increase in sales in the North American market where the Galaxy Note 7 is having fierce competition with the iPhone 7.