Samsung Galaxy Note 7 Problems

Samsung, a global tech powerhouse, is known for its top of the line products that deliver superior value at an affordable price to consumers around the world, but even companies like Samsung are susceptible to unforeseen problems. At the start of 2016, Samsung’s mobile division was “focused on strengthening the competitiveness of its software, along with hardware, services and wearable products,” (Korea 2016) which propelled them to a profitable first three quarters of the year. But at the end of the third quarter Samsung unveiled its latest and greatest Samsung Galaxy Note 7. The Note 7 packed a full list of desirable features such as Gorilla Glass protection, iris scanning, a new and improves S Pen, and 64GB of starting storage. These features and the highly anticipated release of the handset led to 2.5 million phones sold worldwide.

However, the hype surrounding the mobile device came to a screeching halt when reports of the phone overheating and “exploding” surfaced in the media on August 24, 2016. Just five days after the release of the phone. The company immediately announced a voluntary recall for the 2.5 million phones sold worldwide, citing a “faulty battery” and offered a refund or to exchange the device. On October 6, the first report surfaced of the replacement phones having the same issue and to add insult to injury, it happened on a Southwest Airline flight in the US forcing the passengers to evacuate. The problem was not being fixed and with the safety of Samsung’s customers and others at risk, on October 11, the company announced they would “stop all sales of the phone to investigate the problem further,” (BBC 2016) and advising all Galaxy Note 7 owners to power off their devices. Samsung reported that “[Numerous] batteries combusted because of “a very rare manufacturing process error” (Peterson 2016) in which the anode and cathode touched,” thus forcing them to shut the model down and order an official recall.

The biggest question following the “exploding phone” incident was, how could this happen? And in order to find the answers, we must look at some of the events that occurred earlier in the year and in the year prior. Apple, Samsung’s biggest mobile device competitor, was coming off of what their CEO Tim Cook called “their most successful year ever” in 2015, recording a record 234 billion dollars in profit (Richards 2016). Apple was on the rise throughout the entire year and the company believed those same results would carry over into the next year following a successful holiday season. According to Business Insider, in 2015 Samsung made half as much revenue in their mobile division as Apple, despite making more models than Apple. Here we see an immediate threat to Samsung entering 2016 and with the success that Apple was having, the pressure was increased in order to please the shareholders.

In 2016, Samsung released thirty phones compared to Apple’s three and made around 70 billion dollars less in revenue than Apple. This may lead one to believe that production could have been rushed and because of groupthink, the issue may have been overlooked. Evidence of this possibility is also supported by a statistic published by the GlobalWebIndex stating “more consumers are considering the purchase of iPhones than they are Samsung devices. This is especially true for those located in the APAC, Latin America and MENA region,”(Richards 2016). In regions that were known to Samsung to be dominant regions, Apple was the preferred mobile device and Samsung had to have felt the pressure. Samsung has since realized where the mistakes were made and in order to get back to being the trusted brand known for its superior quality and value, it was going to be a long uphill climb for the tech giant.