Reliance On Affiliates Led To Faulty Galaxy Note 7 Batteries

The Samsung Galaxy Note 7 battery saga continues. While the South Korean consumer electronics manufacturer has yet to officially confirm its subsidiary Samsung SDI is the main party responsible for the fact that the Galaxy Note 7 shipped with batteries prone to catching fire and exploding while charging, most signs point in that direction. Industry experts have been debating about what went wrong in the manufacturing process of Samsung's latest flagship device for weeks and various unofficial reports on the matter have simultaneously been surfacing all over the world. According to the latest one, this battery fiasco has indirectly been caused by Samsung SDI's over-reliance on its parent company's affiliates.

Namely, Samsung SDI is by far the most successful compact rechargeable battery manufacturer in the world as the company accounted for 25% of the global market in 2015 while none of its competitors managed to get more than one-tenth of last year's battery market cake. However, that success can mostly be attributed to Samsung's numerous affiliates which are contractually obligated to purchase batteries produced by Samsung SDI. Sources with in-depth knowledge of the matter now claim that it was precisely this over-reliance on affiliate business which led to lax business practices in the battery-making division of Samsung which resulted in the Galaxy Note 7 being recalled in most regions of the world due to faulty batteries. Samsung SDI was responsible for manufacturing 70% of Galaxy Note 7 batteries in the world while the rest was sourced to the Chinese ATL which was supposed to only handle the batteries for devices sold in its home country. After first reports of faulty batteries surfaced, Samsung delegated all of the battery-making tasks to ATL which is now basically saving the day

The same sources are backing this claim with the fact that Samsung SDI has been creating stick-type batteries long after all of its competitors have already switched to pouch-type technology. According to them, this was because the company's biggest affiliates haven't embraced the new trend yet and Samsung SDI was more than content with just their business. Not unexpectedly, Samsung isn't responding to requests for comment on this report just like it didn't comment on a Bloomberg piece from yesterday according to which the company was rushing Galaxy Note 7 in order to beat iPhone 7 to market and had to move the device's launch by ten whole days because of that.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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