Samsung’s Galaxy Note7 Investigation becomes the Cornerstone for Improved QA

Samsung just hosted a press conference in Korea to share the findings of an investigation into what caused several Galaxy Note7 smartphones to catch fire. You can find all the details of the findings here but, in summary, there were two distinct battery issues, from two different manufacturers, that lead to the positive and negative electrodes to touch.

Getting to the root cause of the issue was paramount but what we learned from this process has ramifications, not only for Samsung, but for the industry because Lithium-ion batteries are not going away anytime soon. The actual investigation process Samsung went through over these past few months would have been quite difficult for a manufacturer without Samsung’s scale, capital, R&D facilities and work force. Dedicating 700 researchers to evaluate 200,000 smartphones and 30,000 batteries in a newly built testing facility is dedication.

Of course, a lot was on the line here for the world’s leading smartphone maker. Trust of both users and employees was at risk and winning that trust back was paramount.

Winning Back Trust that Samsung will Continue to Innovate

In early October, we at Creative Strategies conducted a study to assess the US smartphone market. Among the areas we wanted to evaluate was the impact, if any, the Galaxy Note7 incident had on the brand’s smartphone market. We were bullish then, and we are bullish now, that Samsung will recover from the Note7 recall. Only 28% of US Android owners said the Note7 caused them to have a more negative opinion of the Samsung brand. Numbers were even lower among Samsung owners.

Consumers are generally quite forgiving and have a relatively short memory. The car industry has seen several recalls over the years, yet consumers continue to buy. The mobile industry has also seen recalls but nothing to the extent of the Note7. Of course, what made the Note7 such a test case is how passionate its users are and how unwilling they were to give up their units, pushing Samsung and carriers the extra mile to get the phones back.

Samsung was quick to take responsibility and step into action. Communication is where the smartphone leader could have done with more clarity. Whether due to cultural differences in communication styles or due to having the complexity of bringing together the Consumer Product Safety Commission, carriers and retailers, Samsung’s messaging was not as direct as it could have been. Digital messages, however, were pretty clear, from warnings being displayed every time the phone was charged to limiting the charging capacity of the phone to ultimately bricking the phone.

Samsung, like any vendor in every sector that has ever had a recall, cannot promise its products will never again suffer from a malfunction. What can be done, however, it to show the necessary steps have been taken to limit the chance of that happening again.

What is even more important when we are talking about a market leader, especially one that has gained that position by adopting new technologies early, is to show their innovation streak will not be limited by fear. Samsung must show consumers they have set in place checks and balances that will allow them to continue to bring new technology, new designs, and new features into the market in a safe and effective way. The new 8-point battery safety check Samsung will implement going forward is an important step in recognizing that innovation should also come to QA, testing, safety and manufacturing processes.

A Market Leader Acting like a Leader

The fact that made the Note7 recall also unusual is the cause of the issue involved several parties: Samsung and two battery suppliers. While we do not know the names of the suppliers, it would be safe to believe they are not exclusive Samsung suppliers. The use of Lithium-ion batteries is also not limited to Samsung or these two suppliers.

Samsung’s President of Mobile Communications Business, Mr. DJ Koh, stated during the press conference that, during in the investigation, the researchers filed several patents in battery technology, patents that will be shared with the industry. We would need more details to understand the significance of these patents but this is the kind of action we would expect from a market leader, especially one that has a pretty substantial battery business.

Despite the many stories that broke on Friday about Samsung putting the blame on its suppliers, I did not hear that in the press conference. Although I am confident Samsung will require changes in the QA process implemented by its supplier, the focus of the messaging was centered on the changes Samsung will implement going forward, including the appointment of a battery advisory group. As much as there is skepticism around how two different suppliers could have two independent battery issues, I do not believe Samsung cut corners in bringing the Note7 to market. As the industry pushes more designs and features and as users push the capabilities of these devices, making sure all that can be done in a safe manner is paramount.

Innovation needs to involve all aspects of the production process and Samsung is making this point very clear. While adding steps to the process adds costs and time, I expect Samsung to be able to integrate the new steps without adding considerable development time or costs on to new products.

What is Next?

I had initially thought Samsung should move on from the Note franchise and deliver a different product with similar capabilities. After months on hearing countless airport announcements referring to the banned phone as the “Galaxy Note7”, “a Samsung phone”, “the Galaxy phone” and anything in between, I no longer think the Note8 would suffer as much as I initially thought. Better put, anything that will come after the Note7 will equally suffer whether it is related to it or not.

Samsung apologized, provided answers and solutions. What remains to be done is to make sure users who returned their Note7 receive the phone they want and a little extra love from Samsung. If indeed there will be a Note8 on the market in 2017, there is a lot Samsung can do to butter up those users from incentives on upgrades to limited editions to early access, etc.

While I can already read the headlines referring to the next Galaxy phone as “the one that hopefully will not blow up” or “not as hot as the Note7”, I am hoping we will move on — like most consumers will.

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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

10 thoughts on “Samsung’s Galaxy Note7 Investigation becomes the Cornerstone for Improved QA”

  1. They say any publicity is good publicity.

    I think the main Note audience (it’s the very upper end of Samsung’s line, generally above the S, like LG’s V to their G) is able to spot a one-off issue. Half the rest seem to have problems making a difference between “S” and “Note” anyway… I think the damage (there’s bound to be some) is brand-wide, not limited to Note.

    I’m wondering how much of an issue flaming batteries are. I couldn’t find wwide stats, just anecdotes ( ) that seem to point mostly at replacement off-brand batteries and external issues (chargers, back pocket…).

  2. Real innovation will be when we move away from lithium. The rest is shoring up things that, with the wisdom of hindsight, should have been already shored up.

    Many errors happened here – some technical some of pure greed. Guess which is more forgivable.

    Then there’s market might. If this diminishes Samsung’s Android presence, it’s a good thing. One of Android’s benefits is diversification.

    At any rate, what you won’t see are legions of defenders of Samsung.

    1. I think they behaved OK. Obviously they messed up initially, but their recall and their PR are OK (I’m not utterly buying it, but I’ve seen the other side of the story while working for an OEM ^^). Apple never ran into such a dire issue, but their “holding it wrong” and “don’t acknowledge it’s malware” and “there’s NO battery issue” are on the other end of the customer-friendliness scale.

      1. It’s not post launch greed to which I’m referring. More the pre-launch variety.
        What kinds of pressures were R&D, Manufacturing, Operations, Purchasing subjected to. What politics? All to meet a price/timetable.

        Then there’s luck.

        1. There seem to be regular issues across OEMs, ecosystems…

          I really think Samsung got the short straw on that one with an actually dangerous flaw as opposed to a run-of-the-mill battery dying (Apple), lousy loudspeaker (Google), faulty water resistance (Samsung, again), touch disease (Apple again)…

          Samsung lost so much money and image on that one it can’t possibly have been a calculated risk. It’s only notable as a product flaw because flames… it seems that most products have systemic/design flaws, at least in some production runs, especially at the flagship level. Reminds me of one of my first marketing classes: performance comes at the cost of reliability.

  3. Before a recent boarding on a Southwest flight, the gate agent announced, mistakingly, that no Samsung Galaxy 7 phones are allowed on the flight.

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