Rush to beat Apple blows up in Samsung’s face

Article By : Dr. Lorenzo Grande

Executives at the Korean Battery Industry Association fear this accident might trigger a crisis similar to the one Sony experienced.

The South Korean giant Samsung finds itself on the hot seat as the story behind the reported battery fires related to the Galaxy Note 7 unfolds even further. As of September, 92 incidents have been reported in the U.S. alone.

As a recent article on Bloomberg reported, Samsung wanted to beat Apple at the game of innovation by releasing a better, more powerful smartphone before the iPhone 7 reached the shelves. By leveraging the lack of new features in Apple's latest device, executives at Samsung hoped that they could steal Cupertino's podium and finally assert their company as the leader in smartphone innovation. In order to achieve this, they decided to pack a 3500mAh Li-ion battery into their Galaxy Note 7 (as compared to the 2900mAh of the iPhone 7 plus) so as to deliver better performance and longer duration.

However, this addition came at the cost of quality, since—in order to speed up the phone's commercialisation—all of the testing and optimisation were performed in a fraction of the time normally required. Samsung engineers were encouraged to sleep overnight in the office in order to save time from their daily commute, and suppliers were pushed to give Samsung priority with respect to other customers. By August 2016, the required technical deadlines had been met and shipping of the new Korean device began.

It did not take long before some customers started reporting spectacular failures of their new purchase with flames and smoke coming out of the battery compartment, but perhaps the biggest fiasco came from how the company managed the whole situation. At first, Samsung advised its customers to switch off their Note 7, but shortly thereafter, also announced the release of a software patch that would prevent said fires from happening, thus generating a good deal of confusion among the now-not-so-proud owners of Samsung's newest smartphone. By September, the issue had grown to such an extent that the company authorised a complete recall of all 2.5 million phones shipped thus far. The estimated cost for the firm runs into the billions of dollars, not to mention the loss of consumer confidence.

As a result, Samsung is now receiving major negative publicity on many international flights, where cabin crews invite all passengers to switch off their Galaxy Note 7 phones and prohibits them from charging these devices while on the plane. Samsung SDI, the battery maker behind the incident, recently shrank its total staff from 7,408 in late 2015 to 6,937 as of June as a cost-saving measure. Samsung SDI is largely responsible for the battery fires, which seem to have been caused by the use of a thinner separator that could not cope well with the dense packing and caused short circuits within the device. The company no longer supplies batteries for the Note 7, and its role in future products might also be reduced. ATL China has now taken Samsung SDI's place in the supply chain.

Executives at KBIA, the Korean Battery Industry Association, fear that this accident might trigger a crisis similar to the one Sony experienced a few decades back, when Li-ion batteries were first introduced to the market. However, while at that time Li-ion was a relatively new technology and the numbers involved were relatively small; the current situation is very different, since the market has grown exponentially and Samsung is poised to remain one of the biggest players for the years to come. While some competitors like LGChem might benefit from Samsung's mistakes in the short term, the incident can well slow down the decrease in battery prices that has been witnessed in recent years, with negative repercussions for the whole budding industry behind the energy storage miracle. As consumers demand safer devices (would you leave your Samsung charging anywhere in your absence?), stricter regulations might also ensue, stifling what has otherwise been a technological success story second only to that of PV panels in recent years.

Next: Li-ion batteries still prone to catching fire »

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