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Samsung Galaxy Note7 recall will cost the firm about $900 million

by Mark Tyson on 6 September 2016, 13:31

Tags: Samsung (005935.KS)

Quick Link: HEXUS.net/qac6k7

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More information is becoming available to illuminate the disastrous Samsung Galaxy Note7 battery safety issue. The financial impact is rather staggering, with the recall and associated costs expected to add up to KRW 1 trillion ($904 million) according to the WSJ. The same source helpfully provided some technical reasons behind the fire / explosion danger presented by the Galaxy Note7 handsets.

Samsung has about 2.5 million Galaxy Note7 smartphones it wishes to recall. Interestingly the firm used different battery manufacturers to supply the cells for different world regions. In China the batteries come from Hong Kong-based Amperex Technology Ltd (part of the Japanese TDK Corp). Samsung SDI made the batteries for the rest of the world but its source cells come from either China or South Korea, before being packaged in Vietnam. Samsung SDI makes batteries for the Apple iPhone, among various other brands.

Samsung asserts that the battery explosions are nothing to do with the Note7 but are down to a flaw in the affected battery cells. Samsung Electronics handset division chief Koh Dong-jin pinpointed the issue as a flaw in the manufacturing process, resulting in the 'abnormal' coming together of negative and positive electrodes in affected cells. Koh commented that "the quality control standards in the production process may have been insufficient". Following the incident Samsung may be negotiating with a third supplier for batteries for its Note7.

According to a report on Re/Code those who stick with Samsung rather than pursue a refund will begin to get new replacement phones as early as this week. In the US customers will also get a $25 gift card / credit as a thank you. Others less keen to directly swap may exchange for a Galaxy S7 or Galaxy S7 Edge plus a refund of the price difference.

Samsung will have lost significant momentum due to this setback, meanwhile Apple is on the verge of launching its iPhone 7 smartphones at an event in San Francisco tomorrow.



HEXUS Forums :: 7 Comments

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If they had user replaceable batteries they could have just sent out new batteries, guess they might be changing the dimensions of the new cells/handsets to stop the old ones being used.
Good. It's about time that this happens. The Samsung 7 Slate owners got NOTHING as the screen pushed itself away from the unit.
virtuo
If they had user replaceable batteries they could have just sent out new batteries, guess they might be changing the dimensions of the new cells/handsets to stop the old ones being used.

I was thinking that too.
Harder to make phone waterproof then though. Also it is true that the outer casing of a removeable battery probably makes this less likely. All in all I'm satisfied Samsung have made the best of a bad situation with a quick recall
Replaceable batteries potentially extends the phones life too, which phone manufacturers are against for pretty obviously reasons.