Samsung has faced its greatest challenge so far with the recall of the Galaxy Note 7, and it looks like a minor battery manufacturing flaw was enough for a global callback.
The company presented the initial findings of its investigation to the country's technology standards agency in a publicly undisclosed report. However, the company asked for more time to figure out exactly what went south in the building process of the Note 7.
The first conclusion seems to be that a manufacturing error placed pressure on plates that are located within battery cells, leading to the negative and positive poles getting in contact and generating excessive heat.
The company underlines that despite that finding, it requires more time to thoroughly analyze and understand what exactly caused the battery damage.
Galaxy Note 7s Flaming South Korea
The company is making efforts to keep the fallout under control, as 35 cases of combusting or overheating Note 7 phones were reported. What is more, about half of them took place in South Korea. Samsung decided that a total recall of the phablet is the best strategy, and as incidents involving Note 7 devices started to involve children, it probably is.
In its report, Samsung points out that it puts the safety of its customers above temporary profit boosts.
"Even before we have the final result of the investigation, we plan to establish and carry out the best ways to take care of our customers," the company says.
The company adds that the investigation is taking place with the aid of battery manufacturers.
According to a source familiar with the matter, most Note 7s packed batteries manufactured by Samsung SDI Co. Fortunately, the phablets built in China using ATL power sources were not part of the recall.
Prior to the pileup of Note 7s overheating and exploding, the smartphone was one of the best reviewed handsets of the company.
Samsung scored a record high stock value in August, but that number suffered a consistent dent as more and more Note 7s caught fire. The fact that regulators, airlines and Samsung itself warned against using the devices cost the company $22 billion in market value over the course of only two days. In the wake of the scandal, the company's shares lost nearly 10 percent.
According to Samsung, the number of shipped phones reached almost 2.5 million before the recall. Those who are waiting for a replacement must know that starting Sept. 19, Note 7s with new batteries will land in stores and service centers.
Galaxy Note Brand
Samsung poured billions in crafting the Note brand as one of the top smartphone models, and analysts are curious how the battery issues will affect the global perception of the handset line.
Preliminary estimations are indicating that the company will lose north of $1 billion as a direct result of the scandal, but the fact that it took rapid action might help in the long run.
Peter Lee and Justin Choi, analysts at NH Investment & Securities, went as far as comparing the situation to the hastened recall of Tylenol in the 1980s, by Johnson & Johnson's. The recall took place shortly after a tampering incident caused the death of a customer.
Lee and Choi argue that any company's quick response is prone to improve end-user faith in that enterprise, saying that Samsung's "rapid and responsible reaction" will probably enhance the trust of users of its products.
