Note 7 battery explosions were banned and Samsung was frustrated

Samsung got into big trouble yesterday after the Federal Aviation Administration and domestic airlines added Samsung Note7 to the no-flight list. The company also issued a notice to employees and passengers not to bring Samsung Note7 on board or check in. Note7, the company's flagship product for the second half of this year, has been given big hopes, but now Samsung is only trying to minimize the impact of the battery event on the company. Industry insiders said that although the battery problem will not push Samsung to the bottom, but the negative impact will also hit Samsung to some extent.

Extension of the embargo at the domestic level

HNA's official microblog released an "urgent notice on the issuance of Samsung Galaxy Note 7 battery combustion or explosion risk tips." Samsung Galaxy Note 7 was released just over a month ago, with 35 explosions and fires worldwide caused by battery defects, the notice said. In order to effectively prevent related safety hazards and derivative risks, all cadres and employees in the HNA Group are prohibited from carrying Samsung Galaxy Note 7 equipment on board and are prohibited from shipping them with luggage; In addition, HNA's air transport companies do not accept passengers using Galaxy Note7 mobile phones, charging or checking with luggage on aircraft.

After the airline, Capital Airways also announced on its official microblog yesterday that passengers would not be allowed to use Samsung Galaxy Note 7, charge or check luggage on the plane.

Beijing Business Daily reported that so far, Samsung Note7 mobile phones have been banned from carrying and shipping in more than 10 countries and regions including China, the United States, Japan, Singapore, South Korea and Australia. On September 8, Qantas, Jetstar and Virgin Australia announced that passengers using Samsung Galaxy Note7 must not turn on or charge on the plane to avoid danger; On September 9, Singapore Airlines announced that it would prohibit the use of Note 7 on all its flights; The U.S. Consumer Product Safety Commission also issued a warning on the 9th of this month, urging consumers to stop using Note7 mobile phones. American Airlines, Delta Airlines, and United Airlines, the three largest passenger carriers in the United States, announced that they will tell passengers at the boarding gate and on board before getting off the plane. Note7 phones should not be turned on or charged; On September 10, South Korea's Samsung Electronics issued a similar statement for South Korean consumers.

HNA and Capital Airlines are the top two airlines in China that have blocked Samsung. Hong Kong Airlines has also issued guidelines. Passengers required to carry or use the Samsung Galaxy Note7 smart phone, Yuhang, maintain the phone's power off, non-rechargeable or stored in check-in luggage. Regarding whether other domestic airlines will follow up, the Beijing Commercial Daily reporter contacted Air China, China Eastern Airlines and China Southern Airlines. The relevant person in charge of Air China stated that it had not received the notice, and as of the date of issuance, China Eastern Airlines and China Southern Airlines did not give a reply.

In this regard, Samsung China officials said that it is not clear. Samsung had previously issued a statement saying that the state-owned Galaxy Note 7 had no safety problems and would not be recalled because it had adopted a different battery supplier. But yesterday there was news of battery expansion at Note7 in Hong Kong, and Samsung responded that the mobile phone was not a problem batch and was believed to be an isolated incident, but the detailed reasons must be examined in detail.

"Short Life" flagship aircraft

Samsung's Galaxy line has become the leader in Android mobile phones and is the two cars that have driven Samsung's performance in the S series in recent years. With its S7 sales, Samsung reversed last year's decline in its mobile division, and the note 7 was supposed to be a big hit, with 2.5 million units sold in just a few weeks, but the battery incident shattered Samsung's expectations. In the eyes of the industry, this is probably the most failed flagship product in Samsung's history.

It is understood that Samsung SDI, a subsidiary of Samsung, is the main battery supplier of this Note7. Samsung SDI has been producing lithium batteries since 2000 and has now become the world's largest mobile phone battery supplier. In addition to Samsung SDI, Samsung Mobile also uses products from other battery suppliers, including New Energy Technology Co., Ltd., a subsidiary of Japan TDK Co., Ltd.. According to Nomura Securities analyst Cdivis Chang, 65 % of the batteries used in the Note 7 were provided by Samsung SDI and the remaining 35 % were from new energy technology.

The batteries in question are likely to be found in products supplied by Samsung SDI after a spokesman for New Energy said the company was only responsible for the supply of Note7 batteries in China.

"Improper coordination between the battery storage unit and the chip can lead to similar problems, and the excessive pursuit of fast charging may also be one of the reasons for these accidents. People familiar with lithium batteries point out.

According to the list of corporate suppliers in the United States, Samsung SDI is also one of Apple's suppliers in 2016, but Samsung SDI did not respond or guarantee this. An Apple spokesman also said: "We use different battery models and Note7. All parts of Apple's product are subject to extremely strict quality checks and will not be affected by the storm. "

"In the current situation, the hope of Note7's survival is probably not great, and it is also possible to get off the shelf. "The chief editor of the operator World Network, Kangzhao, said.

On the issue of products off the shelves, there have even been analysis on these two days, Samsung may eventually be off the full range of Note mobile phones. In response, staff in charge of Samsung's China PR said that there is no news of the exit, it is unlikely that the current market promotion activities on the Note series are still going on as usual, if there are plans to exit in advance.

Samsung's internal and external troubles

However, in the eyes of the industry, the airline's ban on Note7 may also spread to all Samsung mobile phones, because Samsung's series of products are very similar, airport security is not easy to identify, for flight safety. It is not ruled out that there will be a ban on carrying any Samsung phone on board or check-in.

According to estimates by Credit Suisse, South Korea's Daxin Securities and Pelham Smithers Associates, the cost of Samsung's recall is about $1 billion. Compared with Samsung's previous estimate of net profit of 23 trillion won (about 20.6 billion US dollars) this year, that is, only this recall is expected to cause Samsung's 5% net profit. As of yesterday, the market value of Samsung Electronics has evaporated 22 billion US dollars.

But in an era when time is money, Samsung will miss the golden age of selling. In recent years, Samsung's Note line of phones has been released about a month before Apple's new product launch, hoping to seize the market in advance with a first-mover advantage, but this year this plan will fail. Because of the impact of Samsung's recall and delayed sales, and Apple has released the new iPhone 7 and iPhone 7 plus, and is scheduled to be released in several countries around the world on September 16. Lihuaibin, an IHS analyst, said information from Apple's iPhone supply chain showed that Apple had added some orders to the supplier after the incident with Samsung Note 7.

Industry observer Hongshibin pointed out that the most direct impact of the battery incident is the sales of Samsung Note7, but it will also affect the entire Samsung brand image. Note7, just launched, is in the middle of a global spotlight, a time point where the negative effects are magnified, and consumers tend to remember that Samsung is in trouble.

The Beijing Business Daily reporter learned from an insider close to Samsung China that " Gold nine Silver ten" is the season for dealers to sell large quantities of goods. However, due to the battery incident, dealers are currently reluctant to enter Note7's goods. After a while, Brands such as Apple and Huawei will fill all channels and Samsung will have few opportunities.

"The phone is hopeless and Samsung's reputation is badly tarnished," says RobEnderle, a technology analyst at Ender Group. Samsung could be forced to "kill" Note 7 and jump to the next version, he said.

Mr Kangzhao said the company should do its best to improve Note products and do its after-sales service for the phones it has sold, including recalls; In addition, we need to increase research on Chinese consumer demand. The biggest drawback of Samsung mobile phones is the poor value for money. In particular, compared with Chinese mobile phones, the price is high, the premium ability is gradually declining, and it can not keep up with the trend of price performance of mobile phone products in the Chinese market. Samsung should try its best to reduce the cost and price of products.

With the rise of Huawei, Xiaomi, OPPO, vivo and jinli in recent years, Samsung's growth in the Chinese market has not been optimistic. In the first half of the year, the top five shipments to China were Huawei, OPPO, vivo, Xiaomi and Apple, according to IDC data, and Samsung ranked fifth, in sharp contrast to its previous number one market. In the first half of the year, Samsung also launched a mid-range Galaxy C series of phones specifically for the Chinese market, and it was seen as Samsung's desire to boost the Chinese market.

"Now that the recall has been announced, Samsung will fully implement it as soon as possible and complete it as soon as possible. If necessary, it will need to introduce alternative next-generation products." "Telecom analyst Fuliang admitted.

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