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Samsung’s risk management put to test over battery flaw

Samsung’s risk management put to test over battery flaw

Posted September. 03, 2016 07:01,   

Updated September. 03, 2016 07:09

한국어

Samsung Electronics has officially apologized for battery defects found in its smartphone Galaxy Note7, and announced to recall the entire volume sold worldwide. Bowing his head in front of journalists at the press conference held on Friday, Samsung Mobile President Koh Dong-jin apologized, by saying, “As consumer safety is our utmost priority, we decided to halt sales. We will issue new replacements for all consumers who bought the phone, regardless of when it was purchased.” While industry experts had forecasted that the Korean smartphone giant would issue only replacements for batteries, Samsung has decided to make its unprecedented sweeping recall, considering the gravity of the current issue.

The battery explosion was initially disclosed in an online review titled “Note7 exploded while recharging” on a smartphone community bulletin board on Aug. 24. While there were issues with swollen batteries in some smartphones, a series of explosions right after the release comes as an exceptional case. Samsung also acknowledged that the cause of the explosion lied in Samsung SDI’s battery cell itself, not its Chinese supplier.

Galaxy Note7 was highly appraised by a Bloomberg article titled "Samsung Unveils Iris-Reading Note 7 to Keep Apple at Bay,” right after its release on Aug. 2. Expectations were high on its iris-scanning technology, which expanded its territories to mobile banking and gave confidence that the new model would revitalize the saturated smartphone market. However, the outlook may turn out to be quite the opposite after the recent incident. When the global recall deals a hard blow to Samsung’s sales, the Korean economy will face a severe backlash, as it is already mired in slow production, investment, and consumption. Samsung Group Chairman Lee Kun-hee announced in Frankfurt in 1993 to “change everything except your wife and children,” and turned around Samsung, which had been heavily dependent on quantitative growth. Now, Samsung's risk management efforts led by Vice Chairman Lee Jae-yong will be tested due to the recent battery explosion. On Friday (local time), Samsung Electronics will introduce its Galaxy Note7 and Gear S3 at “IFA 2016,” the European consumer electronics and home appliances exhibition held in Berlin, Germany. This time, Samsung has to make its “Berlin announcement” to put more emphasis on safety and quality.