Samsung’s Net Profit Drops 16.8 Percent


When you buy a new smartphone or tablet and excitedly unwrap it, the last thing on your mind is mortal danger. It’s difficult to believe that something as simple as a smartphone could be dangerous, but recently we’ve learned our lesson.

Six weeks ago Samsung recalled their Galaxy Note 7 phones, because some of them were prone to catching fire.

According to a Samsung official, the number of phones affected was remarkably small — just 0.01 percent of all Note 7 phones sold. But the problem is that they don’t know what’s causing the reaction yet, and the damage it can cause when it happens is extremely dangerous.

This is not the first time a phone has had such a violent reaction, either. It’s happened in the past, except not as often — even if the true percentage of phones affected is low. In 2015, a New Jersey man suffered third-degree burns after his iPhone exploded.

Again, it’s the uncertainty that’s the issue here. That’s why, just three weeks ago, Samsung stopped selling the Note 7 altogether.

Because of that, they stand to lose more than $17 billion in revenue, and the company’s reputation will take a dive in all participating markets, as well.

What’s Wrong With the Note 7 Design?

According to a preliminary report, Samsung may have put too much pressure on its batteries, which is causing the fire hazard. A manufacturing error put too much “pressure on plates contained within battery cells,” and that forces “negative and positive poles into contact.”

In other words, the thin, protective layer of plastic that separates the positive and negative sides of the battery gets punctured. This changes the circuit, and that space becomes the shortest route for electricity to travel, in turn causing a fire risk.

“Cell phones use lithium ion batteries, and these batteries carry much more energy than a standard battery,” explains Dan Thau, Owner of Millennium Circuits Limited. “Due to the battery transporting lithium, the electrolyte must be an organic liquid and by nature is flammable. The lithium travels between the negative and positive sides, which creates the current.

“During manufacturing, if a tiny fragment of metal gets caught inside the electrolyte, it can cause a short, which will generate a lot of heat and the electrolyte to swell and then explode and possibly catch fire,” Thau conjectures.

Quelling the PR Fire

It’s likely Samsung can remedy the problem and create a new batch of Note 7 phones. How? They just need to decrease the pressure on the batteries, perhaps by slimming down the size of other internal components.

Sadly, even if they do fix the issue, the damage is done. The event is already a PR disaster for the company.

After the manufacturing problems are sorted, Samsung has to go on the defensive. They now have to convince consumers that their products are not only trustworthy, but also safe to use and own. Let’s not forget this is not just a few isolated incidents. The danger was enough that airports forbade consumers from taking the Note 7 on flights.

To be sure this doesn’t permeate across the entire brand, Samsung needs to make it clear that this was confined to a single model, the Note 7, and doesn’t apply to “Samsung Phones” generally. In order to convince everyone that’s true, they will need to remain transparent and open.

In addition, they’ve already delayed the release of the S8, their next flagship phone. This is a bold move, but it’s definitely the right one. They need to make it clear to the public they’ve discovered the problem and that it’s been fixed. They also need to make it clear that future iterations will not suffer from this defect.

It will take time, effort and a lot of PR ingenuity, but it’s possible. For now, they’ll just have to weather the storm as more and more comedic memes pop up poking fun of Samsung and their latest failure.

Image by Sylwia Bartyzel

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Kayla Matthews

Kayla Matthews is a Pittsburgh-based tech writer contributing to MakeUseOf, The Gadget Flow and Smart Hustle. Follow her on Twitter to read her latest posts!

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