Bloomberg: Samsung rushed Note 7 to beat a potentially bland iPhone 7


With the Note 5 last year, Samsung cheated on its usual early September launch scheme for the Note line, pulling the announcement forward for mid-August, presumably to gain some early adopter sales before the iPhone Plus edition is unveiled. This year's Note 7 unveiling was done even earlier, on August 2, and, surprise, surprise, Bloomberg reports that Samsung may have rushed its development, given the rumors that the new iPhones won't feature the bi-annual overhauled design, to overpower a potentially unexciting Plus.

This expedited schedule to deliver the first Note with Dual edge display, not to mention an iris scanner and waterproof housing, coupled with the desire to produce most of it in-house, including the battery, has played badly on the quality assurance front, it seems. Granted, one can expect hiccups with the first batches of most major handsets, but not explosions. Long story short, Samsung placed unusual strain on suppliers to come out with a phone intended to capitalize on a supposedly mild iPhone upgrade this year, and, while the Note 7 was met with delight globally, the results of this hectic schedule to include the latest and greatest showed up in the most unfortunate manner. 

So, what happened exactly? Well, Samsung's SDI subsidiary, which for the first time was tasked with producing all Note 7 battery packs, save for the units made in China, apparently tasked the packaging of its own battery cells to subcontractors, and shoehorned a slightly larger battery than the compartment it was made for. While the difference might have been minimal, this placed unnecessary pressure on the battery pack, squashing the isolation plates between the anode and cathode, and short-circuiting the battery, resulting in the thermal runaway we've seen from multiple reports already.

After the first case that appeared online, on September 1 a Samsung engineer immediately posted on the company's internal forums: "Please recall all Note7s and exchange them with new ones. I don’t have to get my PS [profit sharing bonus]. It’s humiliating.” After a brief consultation with the employees, DJ Koh, the head of the mobile division, went out and announced a total recall on the next day. The recall erased 2-3 weeks of Note 7 sales between its announcement and the the first safe appearing in the warehouses, and will reportedly now cost Samsung upward of $2 billion, not including the brand damage. 

This can't come at a more unfortunate moment for Samsung - the chairman Lee who was centralizing the decisions before, has been hospitalized for the last two years, and the culture there sniffs at his heir taking the helm while he is still there. Faced with the management challenges, however, Samsung just promoted Lee's son to the top, and he had to immediately deal with the largest company crisis in decades. The older Lee set the course for Samsung to become a top phone maker by setting a pile of the company's badly produced handsets on fire two decades ago, and demanding that employees focus on quality, but Samsung might be back to square one on that front now. Plus, the iPhone 7 duo turned out to be a pretty big upgrade, and millions of users are now poised to swap their older iPhones with the new models, while some of those who intended to go Note, might now add to the pending demand.

source: Bloomberg

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Galaxy Note 7
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  • Battery 3500 mAh

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52 Comments

1. bobby84

Posts: 595; Member since: May 13, 2016

Yea yea same old speculation, we know. Now Just update us on the when the new one are coming. There is more news about the note 7 instead of running the recall loop 10 times a day. I mean we know already, thats why there was a recall.

11. LetsBeHonest

Posts: 1548; Member since: Jun 04, 2013

This is general announcement: Calm down fellas... This is PA'S another attempt to start a flame war... I'm here to call a truce... Peace....

17. Nathan_ingx

Posts: 4769; Member since: Mar 07, 2012

It comes from a valid source though. I don't get it why Samsung has to compete with Apple? Why can't they compete themselves? With what they have already made. If Samsung makes something good, it will be successful even if they don't release it before Apple.

19. FlySheikh

Posts: 444; Member since: Oct 02, 2015

Couldn't have said it any better.

26. maherk

Posts: 6770; Member since: Feb 10, 2012

Totally agree. I ve said that well before this report came out, because it all makes sense when you think about it. There is no other reason why Samsung have change the release date of the Note series in the past 2 years except for the fact that they won't to steal the hearts of as many Apple users as they can. I don't think it is a bad move by any means to release it atleast 1 month earlier, but there is no escape from the truth, Samsung did rush it this year.

44. shm224

Posts: 283; Member since: Mar 19, 2015

@maherk : do you consider "10 days" earlier a rush?

38. Finalflash

Posts: 4063; Member since: Jul 23, 2013

I disagree, I want them to compete with everyone and everything in every possible way. That is the only reason Android is far ahead of iOS in hardware, software, features, etc. Apple started ahead of everyone and just competed with themselves for the longest time. Now they're behind in every way other than profits and single core CPU speeds. The latter is the only iOS advantage while the former is an active shafting of the same consumer.

40. kiko007

Posts: 7493; Member since: Feb 17, 2016

God would you give it a rest already. They wouldn't outsell the iPhone anyway, so I don't understand why they would start rushing their products to try and steal shine. Nobody buying an iPhone 7 off the bat were ever gonna look at this either, so the effort was pointless lol. And now they've set themselves back for years due to their own stupifying decision making, and they deserved it.

42. Nathan_ingx

Posts: 4769; Member since: Mar 07, 2012

Competition is good, but only to a certain extent. If it leads to a point where companies neglect quality checking their products because they want to grab the majority, then what's the point? I get it Samsung wants to disrupt Apple's base, but they will only bring themselves down with moves like this.

43. shm224

Posts: 283; Member since: Mar 19, 2015

@bobby84 : well, there is at least one lawsuit against Samsung, so if they actually end up before judge/jury, we would discover quite a bit about what really happened.

2. acruzlu unregistered

The iPhone 7 definitely lives up to being bland.

3. WeezyF

Posts: 155; Member since: Jul 09, 2015

i always knew it was rushed. i kept on saying it and other people fely offended.

4. roldefol

Posts: 4744; Member since: Jan 28, 2011

I read something to this effect in the news weeks ago. They were trying to leapfrog Apple, squeezed their suppliers, and made a major QC oversight. But Samsung's defenders here refused to believe it.

8. WeezyF

Posts: 155; Member since: Jul 09, 2015

exactly. Im a samsung user, but i dislike defending company's that just see you as a source of income.

21. AmashAziz

Posts: 2898; Member since: Jun 30, 2014

I also believed that the note 7 was rushed, but didn't write any comment about it because I knew all the trolls and bashers would come rushing towards me. However, this demise of the great note proves who was wrong. Also I don't know why (some) products that skip a letter are disappointing, problematic, or aren't met with critical acclaim. For example Windows 10 (skipping 9), and the note 7.

31. j2001m

Posts: 3061; Member since: Apr 28, 2014

Sorry but all crap, if it was that hard for Samsung to get the battery's then why have they come up with all of them now without any problems at all, the problem was it was the 1st time Samsung was trying to give the battery work to one of its own companies they have not made many battery's for inside of phones, that all

32. AmashAziz

Posts: 2898; Member since: Jun 30, 2014

Talk about like that for your own comment. Their safety checks weren't 'safe' enough due to which their subsidiary didn't live up to the mark. That's the reason, and samsung itself said that.

45. shm224

Posts: 283; Member since: Mar 19, 2015

@roldefol : I thought that's what Apple was known for, squeezing their suppliers like Foxconn to meet their "RUSHED" deadlines. I believe all companies do this, but of course Bloomberg can parse it however way they find it.

48. roldefol

Posts: 4744; Member since: Jan 28, 2011

That may be, but while Apple has had its share of design flaws (hello antennagate!), none of them were hazardous. The issue is not that they pressured suppliers, but that their QC allowed it to result in explosions. And explosions will ALWAYS be news.

51. shm224

Posts: 283; Member since: Mar 19, 2015

@roldefol : Sure, they missed a big manufacturing flaw by one of their suppliers, their own Samsung subsidiary SDI no less, and there is no denying here. But contrary to what the article doesn't show any evidence that Samsung made some last minute caused the battery to explode. I'm also fairly skeptical if that 10 shorter release days played an important role in the battery explosion, given that it's taken Samsung at least 3 weeks to make an official US recall.

5. wando77

Posts: 1168; Member since: Aug 23, 2012

You really class the iPhone 7 as a big upgrade? Faster processor...... EXPECTED Camera upgrade...... EXPECTED Removal of 3.5mm.. EXPECTED (and a downgrade). I bet you were overjoyed when reports came in of note 7 battery problems. The bias on this site is a joke

14. bubbadoes

Posts: 1225; Member since: May 03, 2012

and what came on the NOTE 7 as big update..So big that they even skipped (6) to call it a 7.

22. AmashAziz

Posts: 2898; Member since: Jun 30, 2014

So what, don't expected things count towards an upgrade? If not then the iris scanner, s7 camera, faster processor, 64gb storage, usb type-c port, option for lowering resolution, a more useful s-pen, and several other features were also expected for the note 7. Does that not make it a big upgrade over the note 5??

6. mudcat626

Posts: 224; Member since: Jul 13, 2016

Of course they rushed it, we knew that already!

7. newbey123

Posts: 700; Member since: Mar 19, 2012

Yet in the end it will still fail to the Iphone. Rushing junk to the market will always backfire! So glad I waited to decide between the new Nexus and Iphone!

35. tedkord

Posts: 17311; Member since: Jun 17, 2009

And the reviews continue to come in. The Verge : iPhone 7 Plus - 90, Note 7 - 93 Engadget : iPhone 7 Plus - 91, Note 7 - 92

52. ibend

Posts: 6747; Member since: Sep 30, 2014

PhoneArena : Note 7 - 87, iPhone 7 Plus - over 9000!!!!

9. kamejoko

Posts: 248; Member since: Nov 10, 2011

I think Bloomberg have no brain. Galaxy s7 edge is (smaller than note 7) have 3600 mAh. Have problem like note 7?.

20. roldefol

Posts: 4744; Member since: Jan 28, 2011

They're two different devices with two different internals. The S7 Edge could very easily fit that battery if it's designed for it. Which, by the sound of it, the Note 7 was not.

46. shm224

Posts: 283; Member since: Mar 19, 2015

@roldefol : so are you saying that Note 7 batteries made by non-SDI suppliers have different dimension/specs? The Chinese version of the Note7 batteries are known to be safe, is it because they also have *different* internals? it doesn't make sense, does it?

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