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Business, STEM

Samsung Halts Production of the Galaxy Note 7

galaxy-note7-info

Galaxy Note 7s

As a follow up to an earlier post, The Continuing Overheating Problem In Lithium-Ion Batteries, this post serves as a public service announcement to Galaxy Note 7 smart phone users: Customers with an original or replacement Galaxy Note 7 should power down and stop using their devices immediately!

Owners of Galaxy Note 7s are advised to return their device(s) to the point of sale location for a replacement product or refund. Samsung announced late yesterday that it will permanently stop production of the Galaxy Note 7 smartphone after reports of dozens of fires and explosions worldwide, according to The Guardian.

Reports of Galaxy Note 7 smart phones smoldering, catching fire or even exploding began shortly after Samsung released the latest version of the device in mid-August 2016. On September 2nd, the company suspended sales and announced a voluntary replacement program. An official recall of the devices was issued on September 9th due to pressure from the U.S. Consumer Products Safety Commission (CPSC).

damaged-galaxy-note7

Damaged Galaxy Note 7s

Perhaps when everyone thought it was safe to go back into the water with the Note 7 smart phone, the replacement devices began to exhibit the same problems. It is not yet known if the problem with the replacement phones is the same as the problem with the original Note 7, or if this is a different defect.

Regardless of the cause, this is not a good problem for Samsung or any company to have. According to Greg Roh of HMC Investment Securities, “If it’s once, it could be taken as a mistake. But for Samsung, the same thing happened twice with the same model so there’s going to be a considerable loss of consumer faith.”

Analysts initially estimated the cost of the first recall at about $2 billion.  A second recall for all phones – not just the ones that had lower cost batteries from a certain supplier, plus halting production of the device has an initial cost estimate of $4 to $5 billion. This latest fiasco also comes just before the holiday shopping season. Samsung’s priority right now is to minimize damage to its brand image and to halt its stock price from sliding any further. The Guardian reports that the electronics manufacturer’s stock price dropped 10% in the past two days.

For a short primer on how lithium-ion batteries work, visit The Continuing Overheating Problem In Lithium-Ion Batteries on A Bridge for Business & STEM.

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About Vi Brown

Vi is principal and CEO of Prophecy Consulting Group, LLC, an Arizona firm that provides business and engineering services to private and public clients. Prior to establishing her consulting practice in 2001, Vi worked with Motorola, Maricopa County Government, Pacific Gas & Electric, CH2M Hill, and Procter & Gamble. As an adjunct faculty member, Vi teaches undergraduate calculus classes and graduate level environmental courses. She is also a professional speaker.

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  1. Pingback: Samsung Reports on Investigation of Galaxy Note7 Overheating Incidents | BridgeBizSTEM - January 30, 2017

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