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Samsung Electronics, the cessation of production of the Galaxy Note 7 is a true fiasco whose consequences are already being felt. On 12 October, the main branch of the chaebol (south Korean conglomerate) has announced a downward revision of 33 % of its forecast profits for the third quarter. They should not exceed 5 200 billion won (4.17 billion euros), compared to 7 800 billion won (6.3 billion euros) expected. In question, the judgment decided on 11 October sales and production of the Galaxy Note 7.
This “phablet” marketed on the 2nd of August was the flagship product of the range of smartphones of the giant of the electronics. However, nearly a hundred incidents, of overheating that has caused, in some cases, the kindling of the phone, got the better of the product.
Reported for the first time in August, the incidents had led Samsung to propose, as early as 2 September, trade. But the problem persisted. The evacuation on October 5, a plane from the american company Southwest Airlines because of a Note 7-replacement fire has nothing arranged.
Read also : Stop the Galaxy Note 7 : “Samsung needs to contain the crisis and stabilize its image”
The battery complained of to be wrong
The group aimed to sell between 15 and 19 million of this model by march 2017. Instead, the chaebol which held, at the end of June, with 22.3 % of the global market of smartphones, will start on 13 October, to recover models that have already passed. The operation is expected to last until the end of the year. Chains of factories in Gumi, South Korea, and Vietnam are going to stop producing the device.
beyond the business transaction of an estimated 2 000 billion won (1.6 billion euros), Samsung will have to determine the cause of the problem.
according To the agency of the Korean technology and standards (KATS), a government body dependent of the ministry of commerce, when the first incidents were reported the engineers houses have immediately complained of the battery provided by the subsidiary Samsung SDI. The electrodes were too close, they say, increasing the risk of short-circuit. In agreement with the regulatory body, they were then replaced by a battery of chinese manufacturer ATL.
Read also : How Samsung has come to suspend the sale of the Galaxy Note 7
The persistence of the problems showed that the battery was not in question, or at least not directly. The cause of the dysfunction remains to be elucidated. It could come from the design of the device. The Note 7 is 0.3 mm thinner than the previous model, the Note 5. And its battery has a capacity 20 % higher. However, reducing the thickness of the phone by increasing the capacity of the battery is a real challenge in technology.
A marketing quickly ?
Another issue raised, the chaebol wanted to do it fast. Anxious to pre-empt Apple has announced its iPhone 7 in September and will begin selling it in South Korea on 21 October, the group could have accelerated the commercialization of a product particularly ambitious, neglecting certain aspects of quality. the ” In its race to overtake the iPhone, considers Park Chul-wan, the Korean institute of electronics, Samsung seems to have accumulated so many of the innovations that together became uncontrollable. “
” it May be that we need to look closely at what happens at the governance level ? “, asked of his side, on the 11th of October, in the New York Times, Roberta Cozza, research director at Gartner. In fact, the operation of the company Samsung is still considered as almost military, with leaders often old and with little of the evolution of the technology market. The order comes from the top and is not questionable.
In this context also arises the question of the loss of confidence in a business where quality is an obsession for almost thirty years, thanks to the willingness of Lee Kun-hee, executive officer from 1987 to 2014. After having succeeded the group’s founder, his father Lee Byung-chul (1910-1987), he decided to take out the group of the logic of production of products of average quality. the ” Change everything except your wife and your children “, he had launched in 1993 to the staff. In 1995, he had to lose 150 000 phones to be defective, to mark their commitment to quality.
see also : Telephony : hunting Samsung is open
To a structure unless pyramid
Formed in particular in the United States, his son Lee Jae-yong, who succeeded him in 2014, remains on the line. And launched, in march, a big construction site, in order to instil a new culture to the company, less dirigiste, top-down, along the lines of that of the start-up.
The case of the Note 7 obliges him to restore the reputation of a group whose activity represents 20 % of the GDP of south korea. In an editorial, the daily south-Korean Chosun Ilbo noted that it had not ” took so many years to see Nokia [multinational Finnish] to fall from its position as number 1 in the world of mobile phones “.
That said, the decision to act quickly – that would be also due to concerns related to the survey conducted in the United States after the incident of Southwest Airlines and the conclusions of which could be severe for the Note 7 is rather welcomed by observers. With a shy hope. At the reminder of September, more than 90% of the users had picked up a Samsung model.
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