During the almost hourlong presentation, Samsung offered an extensive technical explanation of the problems with the battery but little insight into the breakdowns that caused the company to fail to identify the problems. Mr. Koh said the lessons the company had learned had been integrated into its processes and culture, yet offered no explanation of how the culture would change or what the problems with the culture were.
The cancellation of the Galaxy Note 7 has been an unprecedented public relations disaster for Samsung, the world’s largest maker of smartphones. It has also cost the company billions of dollars and, for some critics in South Korea, even called into question the very business model that has made Samsung so successful.
The way the company handled the recall also angered regulators and led to confusion as it tried to get back millions of phones around the world.
Part of the problem was that with the Note 7, Samsung had pushed itself to the limit, company officials said. It rushed the Note 7 to the market before Apple rolled out its iPhone 7. The accelerated production was also driven by fear; Huawei, Xiaomi and other Chinese cellphone makers were fast catching up. By packing the Note 7 with new features, like waterproofing and iris-scanning for added security, Samsung also wanted to prove that it was more than a fast follower.
Although Samsung mostly pointed to manufacturing failures on Monday, battery scientists say aggressive design decisions made problems more likely. In the Note 7, Samsung opted for an exceptionally thin separator in its battery. This critical component, which sits between the two electrodes in a battery, can cause fires if it breaks down, varies in thickness or is damaged by outside pressure. Samsung’s choice to push the limits of battery technology left little safety margin in the event of a problem, like pressure on a smartphone casing, two battery scientists said.
“The management pushed their engineers to make the battery separator really thin,” said Qichao Hu, founder of the battery start-up SolidEnergy Systems. He added that doing so could increase the likelihood of fires or explosions in batteries.
The same design flaw was identified by UL, a safety science company that Samsung brought in to do an outside analysis. UL also said the high energy density of the battery design meant more severe problems when a breakdown occurred.
In addition to the design flaws, Samsung and outside experts said manufacturing problems were often directly to blame. For example, the initial fires were caused in part by a pinching of the top corner of the battery by the pouch that held it. The batteries that came from a second supplier in phones issued after the recall had defects in the welding, and some also lacked protective tape.
If Samsung’s overzealous insistence on speed and internal pressures to outdo rivals were partly to blame for the Note 7’s flaws, others said the way the company had handled the situation indicated much broader management problems.
“The rather poor way they handled the first recall suggests that they have trouble accepting problems until they become quite big and they have no choice but to face them,” said Willy C. Shih, a professor at the Harvard Business School. “This time, it will really call into question how they communicate problems, whether management is open to hearing things from the front line.”
When reports of Note 7s catching fire began accumulating, Samsung quickly blamed faulty batteries from one of its two suppliers, Samsung SDI. In early September, it made a bold decision to recall 2.5 million devices globally. It continued to ship Note 7s with batteries from the other supplier, ATL, offering them as safe replacements.
But some of those began catching fire, too.
Officials from the United States’ Consumer Product Safety Commission were angered; the commission had approved Samsung’s initial recall, trusting Samsung’s assurance that the replacement model was safe and knowing that Samsung had no other Note 7 battery supplier. Consumers began ridiculing the Samsung device as the “Death Note 7.” A video clip quickly spread online featuring a game character throwing Note 7s as explosives in an urban battle zone.
On Oct. 6, a Southwest Airlines plane was evacuated after a Note 7 began smoking.
The decision to ditch the Note 7 cost Samsung an estimated 7 trillion won, or $6.2 billion.
An editorial in South Korea’s leading daily newspaper, The Chosun Ilbo, pointed to even greater costs. “The Galaxy Note disaster,” the article read, “shows that the business model that brought Samsung success after success has reached its limit.”
Continue reading the main story