The main culprit behind the Samsung Galaxy Note 7 fires was defective batteries, according to an internal investigation released by Samsung on Sunday.
The issue with the first version of the Note 7 -- with what Samsung calls "Battery A" -- was that the battery's negative electrode had a slight deflection, allowing the positive and negative electrodes to meet. And when that happens, fires start.
The second version of the Note 7 -- the second model came with a new battery from a different manufacturer that was supposed to resolve the issue -- showed that "Battery B" had abnormal welding burrs (slight bumps leftover by welding) on the positive electrode. The welding burrs caused direct contact between the positive tab with the negative electrode.
Samsung's battery manufacturing subsidiary, Samsung SDI, made "Battery A," and Chinese battery manufacturer Amperex Technology built "Battery B."
Where does the Samsung's fault lie in all of this? Even though Samsung found issue with the battery manufacturers, Samsung still picks and certifies its suppliers and then ultimately integrates this outside technology into its products and sells it to customers. Samsung promised it would try to better catch these issues ahead of time.
"This is our device and our brand," said Justin Denison, senior vice president of product strategy and marketing at Samsung, in an interview. "We're the ones that partner with our suppliers to set the specifications. That's where we take responsibility. Our process with respect to quality assurance and testing is extremely robust and exceeds industry standards, but it didn't catch the problems."
In response to the Note 7 problems, Samsung will introduce what it calls an "8 Point Battery Safety Check." The eight steps include a durability test, visual inspection, an X-ray test, a charge and discharge test, a leak detection test, a disassembling test, an accelerated usage test, and then finally a test for comparing battery voltage.
"Hindsight is always twenty-twenty, but Samsung could have predicted earlier on, given the battery aggressiveness, that they needed to implement the new eight point battery safety check and the new software algorithms," said tech analyst Patrick Moorhead. "I believe the new battery board will give them clearer sight into future needs."
Samsung is now on an apology tour and releasing the investigation is its first attempt at making things right. For the investigation, Samsung said it contributed over 700 R&D staff and tested over 200,000 Note 7 devices and over 30,000 batteries. Samsung also brought in three outside companies -- UL, Exponent and TUV Rheinland -- to conduct their own investigations of the Note 7 defects.
Samsung said it's also trying to use the Note 7 incident as an opportunity to improve lithium-ion battery safety across every industry that makes use of the technology. It will contribute its investigation findings to industry standard boards.
"I saw an opportunity to improve lithium-ion batteries, not only for Samsung but for other industries as well," said Samsung mobile head Koh Dong-jin in an interview. "I think this is the best way to bring back customer trust."
The Note 7 debacle began soon after the phone launched last August to rave reviews -- -- "arguably the best big phone ever made," said the Verge. Soon after, reports that the phone caught fire began emerging. Samsung sent out a recall and replaced the phones with another version with a battery from different manufacture. That didn't appear to fix the problem as a fresh set of fire reports soon appeared -- including a Note 7 that started spewing smoke on a Southwest flight.
In October, the company finally ended production of the Note 7 and issued a recall of every device. So far the Note 7 has a 97% return rate, Samsung said. The incident could end hitting the company for at least $5.3 billion in operating profit.
In the end, only 1% of the over 3 million units sold were defective, Samsung said. But it is odd that Samsung found issues solely with the batteries when the two versions of the Note 7 came from two different manufacturers. Analyst Moorhead said this just points to the limits companies are reaching with the current state of lithium-ion battery technology.
"We’ve hit an industry inflection point where we need new strategies and tactics to get even smaller batteries with more life inside even smaller devices," said Moorhead. "This is an industry wake-up call for sure."
