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Samsung's exploding phones came from the pressure to beat Apple, report says

Sensing an underwhelming iPhone 7, Samsung pushed its engineers beyond the breaking point to put new features into the Galaxy Note 7
REUTERS/Kim Hong-Ji/File Photo

Based on little more than a rumor that the iPhone 7 was going to be a minor update with little innovation, Samsung pushed its designers, engineers and suppliers beyond the breaking point to produce the Galaxy Note 7 with multiple industry-first features and an earlier-than-expected launch date.

But when reports of burning and exploding smartphones began to flood in, Samsung knew it had gone too far.


According to sources speaking to Bloomberg, the company executives met early in 2016 to talk about the features it would include in the new Note 7. Under pressure to deliver, the company's new phone chief D.J. Koh pushed to deliver new features such as a high-resolution curved screen, an iris scanner and a more powerful and faster-charging battery.

Suppliers were pushed harder than ever before according to the report, but the company met its aggressive deadline and on August 3, more than a month before the launch of iPhone 7, Koh walked out on stage in New York to show off the new Galaxy Note 7.

Early reviews were hugely positive, and following the success of the Galaxy S7 and Galaxy S7 Edge in the first half of the year, Koh looked like he had delivered on all fronts. But after reports of explosions, Samsung botched the recall by announcing it before it had a system in place to repair or exchange the phones and without notifying product government authorities such as the US Consumer Product Safety Commission, which issued its own recall days later.

Initially it was thought the faulty Galaxy phones were largely restricted to the US and Europe, but fresh reports from China of exploding Note 7 models — phones thought to be safe — will continue to worry shareholders and Samsung's board alike.

The full impact of the recall for Samsung will not be known for some time. The initial cost of replacing all 2.5 million Note 7s is estimated to be around $2 billion, but the damage to Samsung's reputation may have the bigger long-term impact on the company.

In the meantime, black iPhone 7 models and the iPhone 7 Plus are selling out around the world, indicating Apple is doing quite well with what is, by many accounts, a not-very-revolutionary smartphone with no headphone jack.