After much speculation Samsung has put their supply chain in the middle of a production fiasco. A recent recall has led Samsung to stop its production of the Samsung Galaxy Note 7 indefinitely for the second time. It has been almost a month since the initial recall of the Note 7 due to customers complaining about phones overheating and explosive behavior. Samsung has been quoted saying that this is due to “battery issues.”
Personally I believe that Samsung should have done a better quality assurance check before releasing the Note 7 to the public. Given the production costs being rather low in their 3rd party battery manufacturing facilities, based near HQ in South Korea, one can assume that the outsourced supplier manufactured the batteries with low cost components. This is understandable, given the volume that Samsung produces the manufacturer probably felt that this was the only way for this battery to be produced. It’s on Samsung to provide the necessary testing and QA checks to ensure that the end consumer is safe.
After the second production cord being cut, investors are becoming very speculative towards Samsung as their stock tumble 4% in 24 hours. While on the other hand, Samsung’s biggest rival , Apple, sees a increase of 1.9% on the news with shares going higher and higher up.
Samsung is said to absorb over $2 Billion in losses due to this unsuccessful nightmare. Samsung must rebound from this disaster by owning up to the real issues and what they will be doing in the future so that they can have a chance against Apple.