The recent phone recall by Samsung Electronics, a major smartphone manufacturer is seen as the biggest phone recall in many years. The company has recalled about 2.5 million Galaxy Note 7 phones. This has hit the smartphone market by surprise as the FAA is also considering placing a ban on the faulty smartphones, which basically means that travellers will not be allowed to take the faulty Samsung Galaxy Note 7 with them on-board flights in the US or other destinations. Samsung had announced that it has decided to recall the phones, and the recall has been implemented, with users already getting replacements for the faulty Samsung Galaxy Note 7s. The announcement further expresses the company’s plans to halt sales after some serious concerns of faults in the battery that causes explosion of the battery.
What the recall mean for Samsung
The outcome of the phone recall is not looking good for the smartphone manufacturer, as shares in Samsung SDI, which is the company that produced the faulty batteries, continued to decline, following announcement of the Note 7 recall. The shares of the company fell by 2.8% to close at KRW 105,500. While the giant smartphone manufacturer’s shares, Samsung Electronics closed up 0.6%. This is definitely not good for both companies, analysts also predict that this could cost the company about $904 million. Samsung Electronics is already contemplating hiring a new supplier for its batteries. The recall couldn’t be any worse as Samsung’s major rival Apple Inc. released its newest iPhone few weeks ago. Samsung Electronics is not the only smartphone manufacturer that uses the lithium-ion batteries in its phones; virtually all phone manufacturers make use of the batteries due to their long-lasting power and lightweight.
Reason for the recall
The smartphone company is recalling the phones due to what it calls a ‘minor flaw’ in the battery manufacturing process, which causes the Samsung Galaxy Note 7s to explode while charging. To further understand this, the manufacturer of the faulty batteries, Samsung SDI Co. said a flaw in the battery cell resulted in positive and negative electrodes coming together which is abnormal, and the sale of the phones needs to be discontinued. Although Samsung SDI Co. is not the only company that supplies batteries to the smartphone manufacturing giant, the batteries supplied by the company are those found to make the Samsung Galaxy Note 7 explode while charging.
The other company supplying batteries to Samsung, which is Amperex Technology Ltd, supplied batteries for the galaxy note 7 that were sold in China, which no reports have come so far about any phone explosion. The flaw identified in the batteries has put Samsung in the news, as the smartphone manufacturing company with one of the largest phone recalls. A large number of the Samsung galaxy note 7 smartphones are affected, since Samsung SDI supplied about 65% of the batteries used on the Galaxy Note 7s , with basically only 35% supplied by Amperex Technology.