Technology

No surprise as Samsung concludes battery caused Note 7 fires

Cantillon: Company faces tricky task to rebuild consumer confidence after costly failure

Design defect: a Samsung Galaxy Note 7 phone after catching fire. Photograph: Shawn L Minter via AP

Tue Jan 24 2017 - 06:49

Samsung has finally revealed the results of its investigation into the Galaxy Note 7 and its unwanted feature: the ability to catch fire. The conclusion surprised no one: it was a faulty battery that caused the problem.

This backs up what has been said from the beginning, but the crucial question was whether Samsung could pinpoint the exact problem with the battery that caused the Note 7 to overheat. It says it has, and will be investing millions in making sure that the same thing doesn’t happen again. But can consumers be convinced?

In Samsung’s defence, the company moved reasonably quickly to address the problem as soon as it emerged. When it investigated initially, Samsung said the problem was with batteries made by specific manufacturers and quickly began a programme to replace the affected phones. The outcome? The replacement phones suffered similar issues. Then came the airline ban, a further hit to the company’s reputation.

The failure was a costly one for Samsung. Not only did it damage the company’s reputation with consumers, but it also wiped $5.3 billion (€4.9 billion) off its operating profit. All that has a lasting effect in the minds of the public, and creates a negative perception that Samsung will have to overcome.

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The official finding is that manufacturing and design defects in Note 7 batteries caused short-circuiting. Samsung, for its part, says it has put in place an eight-point battery check to stop the same thing happening again.

Samsung is now faced with the tricky task of rebuilding its reputation after the incident, and doing it fast. The S8, which was expected to be announced in the coming weeks at this year’s Mobile World Congress, as has become Samsung’s tradition, will now be delayed. There is no timeframe for the flagship phone’s launch, which puts it in something of a difficult spot with consumers.

In a fast moving marketplace, Samsung risks being left behind if it doesn't get another phone out to consumers, who may be looking to upgrade from their previous Android handsets. With Apple expected to unveil a revamped iPhone in September to coincide with the 10th year of the device, the pressure is on Samsung to come up with a worthy contender that will grab people's attention – and come up with it before Apple seizes the limelight yet again.

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