Samsung’s Note 7 crisis stems from a rush to compete with Apple, according to a report released by Bloomberg,
After discovering that the iPhone 7 would include mainly incremental upgrades rather than major innovations, Samsung supposedly accelerated the launch of the Note 7 in an effort to lure consumers away from the upcoming iPhone.
Bloomberg reports that senior leadership at Samsung pushed suppliers to meet tighter deadlines, despite significant new features. The Note 7 features a high resolution screen, iris scanning technology, and fast charging batteries among other upgrades.
Reports of the Note 7’s batteries bursting into flames and overheating surfaced online just days after the phone’s launch. By the end of the month, dozens of phones had already proven fire hazards. Before consumers knew it, Samsung’s mobile chief D.J. Koh had committed to recall all 2.5 million shipped Note 7 devices.
Bloomberg reveals that the source of Samsung’s battery problems can be traced back more than a year. During the development of the Note 7, Samsung faced decreased sales as a result of a saturated market as well as intensified competition with Apple.
Essentially, Samsung gave the Note 7 a 3500mAh battery rather than the 3000mAh featured in the previous model supplied by Samsung SDI Co. Originally, it was assumed that an error in production put pressure on the plates within the battery cells, bringing negative and positive poles into contact.
Later on however, Samsung eventually elaborated, stating that the phone’s battery was slightly too big for its compartment, and that the tight space pinched the battery, causing a short circuit.
At the end of the day, Samsung will pay over $2 billion for the recall of over 2 million devices and has lost $26 billion in market value. The quick and dramatic response however, might be the first step in regaining the consumer’s trust.
The company has resumed sales in South Korea, but has given no word on when global sales of the Note 7 will resume.