Apparently, the cause of the Samsung Galaxy Note 7 explosions and fires that forced the company to recall all 2.5 million devices sold was due to a rumor that the iPhone 7 was going to be a ‘dull’ upgrade, according to Bloomberg. The source says Samsung saw an opportunity and pushed the device for an early release ahead of schedule.
The top brass at Samsung Electronics, including phone chief D.J. Koh, decided to accelerate the launch of a new phone they were confident would dazzle consumers and capitalize on the opportunity, according to people familiar with the matter. They pushed suppliers to meet tighter deadlines, despite loads of new features, another person with direct knowledge said. The Note 7 would have a high-resolution screen that wraps around the edges, iris-recognition security and a more powerful, faster-charging battery. Apple’s taunts that Samsung was a copycat would be silenced for good.
It seems that the move has backfired for Samsung, literally. Ironically, the recall has boosted iPhone 7 sales quite a bit.
Just days after launch, there were numerous reports of the Galaxy Note 7 catching fire and in some cases exploding. To take it a step further, Samsung originally neglected the idea of a recall, and even had issues doing so in the US.
“This is creating an enormous problem for the company — for its reputation and ability to support its customers when there’s a problem,” said David Yoffie, a management professor at Harvard Business School and board member at Intel.
The company was able to trace the issue as it was found that it was an issue with the lithium ion batteries. Samsung’s engineers opened an investigation with its suppliers to figure out who’s responsible.
To make it even worse, it was found that the faulty batteries were coming from Samsung’s own subsidiaries, not a third-party supplier.
The cost for the recall is an estimated $2Bm, and that’s not all. It’s believed that many are leaving the platform and switching, from Samsung to Apple.