Samsung’s recall of Galaxy Note7 smartphones because of exploding batteries remains a challenging task, and some users, for example, in Canada, are still not exchanging their devices for a refund or a different phone.
The South Korean company has decided to cut these phones from the network, adopting similar measures to those taken last month in New Zealand and earlier this month in Australia.
The company said Wednesday that starting Dec. 12, functional limitations on Note7 phones, including curbs on the battery charge, and Wi-Fi and Bluetooth disablement will be introduced in Canada.
From Dec. 15, customers still using the Note7 will no longer be able to connect to any Canadian mobile network service to make calls, use data or send text messages. Samsung said it had been able to secure nearly 90 percent of the Note7 devices that were brought into the Canadian market.
When Samsung announced in September a recall of the Note7 in tandem with Health Canada, a Canadian federal government department, it was said that about 22,000 of the recalled smartphones were sold in the country.
Samsung announced a global recall of the Note7 in early September after it found a “battery cell issue.” The U.S. Consumer Product Safety Commission on Sept. 15 announced a recall in the U.S. of about 1 million Note7 phones as it found that the lithium-ion batteries in the devices could overheat and catch fire. By Oct. 13, the CPSC expanded the recall to include replacement Note7 phones that Samsung had supplied to customers under the first recall as they too were found to have the battery problem.
The company also stopped production of the phones. It has yet to explain in detail what caused the batteries to explode. A recent report suggested that the phone design could compress the battery even during normal operation.
Samsung said on Dec. 1 that it was working with local carriers to disconnect from Dec. 15 Note7 phones that were still being used by customers in Australia. Note7 owners in the country responded well to the recall, but a small number of affected devices are still with them, the company said. Customers in New Zealand were to be disconnected from Nov. 18.
The Note7 recall has been both a public relations and financial debacle for Samsung. The company has reported that the third quarter revenue of its IT and Mobile Communications division was down 15 percent from the same period last year to 22.5 trillion Korean won (US$19.8 billion) while operating profit fell 95 percent to 100 billion won, as a result of the discontinuation of the Galaxy Note7.
German luxury automobile maker BMW plans to roll out a new version of its i3 electric car next year with a longer range and revamped design, German weekly Welt am Sonntag reported, citing company sources.
BMW will rework the front and rear of the i3 and equip the car with a new battery to increase its range substantially beyond the current 300 km maximum, the paper said, adding that the increase would be below 50 percent.
BMW has been torn about whether to accelerate development of new electric cars given its expensive early investment has only resulted in lackluster sales, with 25,000 i3s delivered last year.
BMW was not immediately available for comment on the newspaper report.
Samsung Electronics is still the number one global seller of smartphones in spite of the Galaxy Note 7 fiasco.
According to bean counters at the Gartner Group, Samsung sold over 71 million smartphones in the July-September period worldwide, accounting for 19.2 percent of the market.
It did lose market share (23.6 percent) from a year before and sales dropped 14.2 percent year-on-year. It is the company’s worst performance since its 12.3 percent drop in smartphone sales in the fourth quarter of 2014.
Gartner research director Anshul Gupta said:
“The decision to withdraw the Galaxy Note 7 was correct, but the damage to Samsung’s brand will make it harder for the company to increase its smartphone sales in the short term. For Samsung, it is crucial that the Galaxy S8 launches successfully, so partners and customers regain trust in its brand.”
However Apple did not benefit from Samsung’s hardships and its iPhone 7 did not pick up extra sales. Despite the launch of its iPhone 7 Plus, Apple sold 43 million smartphones, a 6.6 percent drop year-on-year.
Its market share declined from 13 percent to 11.5 percent, the lowest since the first quarter of 2009. The company’s sales fell by 8.5 percent in the U.S. and by 31 percent in China.
Gartner research director Roberta Cozza said that the withdrawal of Samsung’s Galaxy Note 7 may benefit sales of Apple’s iPhone 7 Plus only slightly, as Note 7 users are likely to stay with Samsung or at least with Android.
Google’s Android has captured market shares from Apple’s iOS, dominating nearly 88 percent of the total market in the smartphone operating system market.
The winners have been Chinese smartphone vendors posted significant growth, closing the gap with them.
Three Chinese vendors ? Huawei, Oppo and BBK Communication Equipment ? combined to carve out 21 percent of the global smartphone market. The trio reached 32 million, 24 million and 19 million orders, respectively.
Gartner said only the three among the global top five increased their sales and market shares during the quarter.
Meanwhile, global sales of smartphones tallied 373 million units in the third quarter this year, a 5.4 percent rise from a year earlier, according to Gartner.
Hopes that Apple might sex up its iPhone 8 with OLED technology could be dashed by the fact that its suppliers can’t make enough of the technology.
After producing an iPhone 7 which was more or less the same as the last one, Apple had been expected to do something special with the iPhone 8. OLED screens were being touted as a way that the tax-dodging cargo cult might pull that off.
However according to the IB Times suppliers may not be able to meet the demand.
This could force Apple to release limited next-gen iPhone units in 2017 with the rest using the older LCD technology. In other words it will be regurgitating the same technology it has used for years meaning that the iPhone 8 will look and feel like the iPhone 7, which looked suspiciously like the iPhone 6, which was not much of an advance from the iPhone 5.
Samsung Display, LG Display, Sharp and Japan Display cannot mass produce enough units as demanded by the smartphone industry. OLED screens are difficult and time-consuming to produce and it is likely that this constraint will spill over to 2018.
Samsung is reported to be the chief supplier for iPhone’s OLED panels in 2017 but it is facing low yield rates along with its high demand. Apple ordered an initial round of 100 million units for 2017 but Samsung is likely to produce only a portion of that.
KGI Securities analyst Ming-Chi Kuo said that Apple may resort to releasing a fair amount of units featuring screens that use older LCD technology.
Recently, iPhone customers in the country have complained about the problem to the China Consumers Association, the group said in a statement on Tuesday. The shutdowns occur when the phone’s battery charge drops to between 60 and 50 percent.
The problem will persist despite upgrading to the latest version of iOS. It will also occur in both cold environments and at room temperature. After the automatic shutdown, the phones will also fail to turn on without connecting to a power supply.
A “considerable number” of consumers have contacted the China Consumers Association, and many have the same problem, the group said. It made the statement as the local press in the country have written stories about the shutdowns.
Apple hasn’t publicly commented on the matter.
Prior to Tuesday’s statement from the consumer association, affected iPhone users in the country also took to local social media services to express their complaints.
“When the battery is at 60 percent it shuts down,” wrote one user on Sina Weibo. “On restart, the phone will display no battery. Then when I turn it on again, it will be normal, only to automatically shut down again.”
Local Chinese media have posted the letter the China Consumers Association sent to Apple. It asks that the company reply within 10 days.
The association is asking Apple what the problem is, whether the phone’s battery is responsible, and what steps the company will take to address the issue.
Beginning in the year 2019, all newly manufactured hybrid and light-duty electric cars will be required to make noise when they are traveling at low speeds so pedestrians can better hear and avoid them. That’s in the United States.
The change of rules comes from the US National Highway Traffic Safety Administration, which announced on Monday for a second time that it will require the audible alert when traveling at speeds below 18.6 miles per hour (29.9km/h) to help prevent roughly 2,400 pedestrian injuries per year. The requirement will apply to all hybrid and “electric light vehicles with four wheels” and a “gross vehicle weight rating of 10,000 pounds or less.”
The requirement was originally required by the Pedestrian Safety Enhancement Act of 2010, and was proposed by the NHTSA to the public in early 2013 to be ratified the following year, but was ultimately delayed until March 2016. Now, it has been delayed another three years to allow all hybrid and fully-electric vehicle manufacturers to comply with the standards.
Automakers to install external waterproof speakers in EVs and HEVs
Manufacturers of these vehicles now have until September 1, 2019 to meet the requirement, which means that any consumer who buys a hybrid or light-duty EV after this date will be sacrificing the fascinating whisper-quiet sensation of operating a hybrid or all-electric vehicle at lower speeds in order to ensure pedestrian safety and compliance with a five-year delayed mandate. For most companies, this will be done by installing small, external waterproof speakers somewhere outside of each vehicle at an estimated cost of around $23 million in the first year.
Back in 2009 and 2011, the NHTSA published two studies showing the incidence rates of pedestrian and bicyclist crashes between hybrid electric vehicles (HEVs) and internal combustion engine (ICE) vehicles. While the tests were done in a variety of road and weather conditions, the charts show that crashes in both types of cars mostly occur in zones with low speed limits, while they are twice as likely to occur among HEVs when backing up, slowing or stopping, or entering and leaving parking spaces.
The first report shows the number of pedestrian crashes at potential low-speed maneuvers between the two types of engine types, given a sample size of just over half a million cars (8,387 HEVs and 559,703 ICE vehicles). Based on the results, HEVs accounted for 1.2 percent of all low-speed crashes while regular gas-powered cars accounted for 0.6 percent.
The second report is an update on the first one and shows the typical odds for hybrid electric versus internal combustion engine crashes involving pedestrians and bicyclists. Based on a case-control study combining about 1.03 million HEVs and traditional cars, the chart shows the pedestrian crash rate for HEVs at 0.77 percent, while gas-powered cars were at 0.57 percent. Meanwhile, the bicyclist crash rate for HEVs was 0.48 percent while gas-powered cars were at 0.30 percent.
“This is a common-sense tool to help pedestrians — especially folks who are blind or have low vision — make their way safely,” said NHTSA Administrator Dr. Mark Rosekind. “With pedestrian fatalities on the rise, it is vitally important we take every action to protect the most vulnerable road users.”
The studies are not new, and Honda was aware of the concern as early as 1994 when it filed a patent for a simulated EV noise generator to let drivers and nearby pedestrians know the operating conditions of a vehicle.
Of course, not all manufacturers have been willing to comply and “some OEMs aren’t doing anything until they know what the federal law says,” says Chris Duke, host of auto improvement show Motorz. Ford is one of several car makers not yet adding warning sounds to its EVs and plug-in hybrids, including its “deep space silent” Focus Electric.
Another example is Tesla. In its March 2011 earnings report, the company acknowledged the NHTSA’s minimum standards but said the requirement to alter the design of its vehicles could “negatively impact consumer interest in [its] vehicles.” While current Model S and Model X sedans still do not emit noise at low speeds, some customers have already signaled interest in having them available for the safety of nearby pedestrians.
Of course, when driving at speeds above 35 miles per hour, wind and tire noise are more likely to be louder to nearby pedestrians and bicyclists than engine noise, so the real concern here is low-speed maneuvers. At any rate, the importance of small audible details should become more noticeable to consumers as self-driving vehicles begin emerging onto the market over the next few years.
Electric vehicle maker Tesla Motors Inc has agreed to acquire Germany’s Grohmann Engineering, which develops automated manufacturing systems for batteries and fuel cells, as the California-based company seeks to expand its production more than sixfold by 2018.
Unlisted Grohmann Engineering, based in Pruem, Germany, helped Tesla rivals Daimler and BMW build production facilities for electric car batteries.
Tesla is seeking to raise its global manufacturing capacity to 500,000 vehicles in 2018 from an expected production rate of about 80,000 this year. Its main production facility is in Fremont, California.
“To date, we have increased the production rate at our Fremont Factory by 400 percent in four years, and we expect this acquisition to accelerate that growth rate,” Tesla said in a blogpost.
Following the acquisition, which still needs to be approved by the cartel authorities in Germany, several elements of Tesla’s automated manufacturing systems will be designed and produced in Pruem, close to Germany’s border with the Netherlands and Luxembourg.
The deal, whose financial terms were not disclosed, is expected to add over 1,000 engineering and skilled technician jobs in Germany over the next two years Tesla said in its blog. Grohmann currently has around 700 employees.
Tesla agreed on Sunday to buy a 74.9 percent stake from company founder and majority owner Klaus Grohmann, and a further 25.1 percent stake belonging to private equity firm Deutsche Beteiligungs AG (DBAG), DBAG said in a statement on Tuesday.
DBAG said it expected to earn in the mid single-digit million euro range by selling its stake in Grohmann and that Grohmann had revenues of 123 million euros ($136 million) in 2015.
DBAG said Grohmann had developed production lines for battery cells and batteries for “numerous” German and international automobile manufacturers. Grohmann was also specialized in the industrial production of fuel cells, DBAG said, and was active in the electronic and semiconductor industries as well as the biotechnology and medical technology sectors.
Grohmann Engineering will be renamed Tesla Grohmann Automation after the deal and will serve as the initial base for Tesla Advanced Automation Germany with other locations to follow, Tesla said.
LG Chem Ltd, the world’s largest automotive battery manufacturer, will debut in the fledgling U.S. market for home energy storage through a partnership with rooftop solar company Sunrun Inc, the companies said on Wednesday.
The move will put LG in direct competition with electric car maker Tesla Motors Inc, which unveiled its own home battery packs, called Powerwalls, last year. Sunrun has been using Tesla batteries in its home storage systems in Hawaii since earlier this year, and this deal will add LG to its list of suppliers.
Financial terms were not disclosed. The agreement is not exclusive to either party, Sunrun said.
“Tesla makes all the headlines, but LG manufactures most of the lithium ion batteries,” Sunrun Executive Chairman Ed Fenster said in an interview. LG’s entry into the market will help bring down battery prices and help them make economic sense for more households, he added.
The deal comes as Tesla is planning to buy Sunrun’s bigger rival, SolarCity Corp, as part of its bid to sell a fossil fuel-free lifestyle in which people can have solar panels on their roofs generating electricity to power their homes, charge home battery packs and recharge their electric car batteries.
Home battery systems allow customers to store solar power generated during the day for use after sunset. Eventually, as utilities move to charging higher rates for power used in the evening, when demand is greatest, the batteries could bring customers significant savings. Battery packs can also serve as a backup power source in case of an outage.
Sunrun currently offers batteries with its solar installations only in Hawaii, where sky-high power prices make such systems economically attractive. The batteries have enabled many residents there to supply all their own electricity needs without relying on the grid.
Most of Sunrun’s battery systems are deployed through leases or power purchase agreements, which allow consumers to use the technology by paying a monthly fee and avoiding a large upfront cost.
In addition to Sunrun customers, LG Chem’s batteries will be available to the entire solar industry through AEE Solar, Sunrun’s solar products distribution arm.
Tesla Motors Inc has plans to introduce a ride share services program and will announce details next year, the luxury electric vehicle maker said on its website, a service first outlined by Chief Executive Elon Musk in his master plan in July.
News of the Tesla Network was in a disclaimer about the self-driving functionality on new Model S vehicles. Musk said last week Tesla is building new vehicles with the necessary hardware to eventually enable full autonomy, although the software is not yet ready.
“Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year,” read the disclaimer.
Tesla did not immediately respond to a request for more detail.
Car makers have rushed to invest in so-called mobility services, hoping to capture the potential trillions of dollars in revenue from selling both vehicles and such on-demand services, while carving out a stake in the industry dominated by Uber.
Barclays analyst Brian Johnson wrote in a note to investors on Thursday that although a Tesla Network could “excite the market” over its potential earnings stream, it was a costly proposition.
“While we think ride-sharing/hailing is the future of mass-market mobility, we have some financial concerns with the idea of an OEM-owned fleet,” Johnson wrote.
Venture capitalists and corporate investors had poured nearly $28 billion into the ride services sector in the past decade as of June, according to a Reuters analysis.
General Motors has made the biggest bet, investing $500 million in Lyft in January. GM’s upcoming electric Chevrolet Bolt was designed expressly with car sharing in mind, executives have told Reuters.
Money-losing Tesla lacks the deep pockets of GM, and ride services companies like Uber and Lyft burn billions of dollars in price wars to secure regional dominance, as occurred with Uber in China before it ceded to local rival Didi Chuxing.
In his “Master Plan, Part Deux” in July, Musk outlined a system in which a Tesla owner could add a car to a shared Tesla fleet using a phone app, allowing it to “generate income for you” and lower the cost of ownership.
Musk said that in cities where car ownership is lower, Tesla would operate its own fleet.
Under the agreement, which is a non-binding letter of intent, Tesla said it will use the cells and modules in a solar energy system that will work seamlessly with its energy storage products Powerwall and Powerpack.
The Japanese company is already working with the U.S. automaker to supply batteries for the Model 3, its first mass-market car.
Panasonic is expected to begin production at the Buffalo facility in 2017 and Tesla intends to provide a long-term purchase commitment for those cells, Tesla said in a statement, adding the agreement is contingent on shareholders’ approval of its acquisition of SolarCity.
Last week Tesla and SolarCity Corp shareholders agreed to vote on the proposed merger on Nov. 17, and the automaker said it would provide plans for the combined company ahead of the vote.
The fourth-quarter impact on Samsung Electronics’ operating profit will be “in the mid-2 trillion won range,” the company said in a press release early Friday. Using the midpoint of 2.5 trillion South Korean won, that would be about $2.2 billion. The damage will continue in the first quarter of next year, with an impact of about 1 trillion won, Samsung said.
The company announced Tuesday it had permanently stopped production of the Note7. It had launched a recall of the phone just weeks after it went on sale because of fires and explosions that destroyed some of the devices. Then, some replacement units it sent out as part of the recall had the same problem.
Also on Friday, the company said it would make significant changes in its quality assurance processes to enhance product safety for consumers.
Samsung didn’t forecast how the Note7 incident would affect sales in the coming quarters, but said it will “normalize” its mobile business by expanding sales of other high-end phones, such as the Galaxy S7 and Galaxy S7 edge.
On Wednesday, the company estimated the Note7 problem would cut about 2.6 trillion won out of a third-quarter operating profit of 7.8 trillion won. It also expects to report revenue of about 47 trillion won, down from the 49 trillion won it had forecast earlier.
The Tame Apple Press has been claiming that almost all the Galaxy Note 7 customers would defect to Apple’s iPhone 7, but a new survey suggests that less than 12 percent of them are thinking like this, and that number is shrinking by the day.
Branding Brand conducted a second survey of 1,000 Samsung smartphone owners from October 11-12 to compare consumer confidence to its earlier study, conducted on September 23.
It seems that only 40 percent of Note7 users have had enough of Samsung and want to go somewhere else. Given what has happened, this is a rather small figure and of that 40 percent, less than a third are moving to something Applish. This figure is down from an earlier survey which was conducted after the first recall.
As expected most Samsung users will go with another Android phone (up to 62 percent from 57 percent) and eight percent thought they would buy a Google Pixel. Given that is not really out yet we are not even sure why this option was in the survey. The Pixel is another Android device that means that Apple is going to get only 12 percent of the total Samsung users. More than 88 per cent of Note 7 users will either stay wilt Samsung or Android.
Chris Mason, co-founder and CEO of Branding Brand said:
“As we’ve watched the Galaxy Note7 recall and discontinuation play out, even more people say they will switch their smartphone brand. Consumers want to be confident in their personal safety and will choose a new smartphone accordingly. Only a week after Google’s smartphone launch, many already have their sights set on the Pixel.”
The U.S. government has issued an emergency ban of Samsung’s exploding Galaxy Note7 devices from all flights, strongly urging device owners to take advantage of the company’s exchange and refund offers.
Owners of Galaxy Note7s may not transport the devices on their person, in carry-on baggage, or in checked luggage, Department of Transportation and the Federal Aviation Administration said. The smartphones also cannot be shipped as air cargo under the ban, which goes into effect Saturday at noon Eastern Time.
Passengers who attempt to evade the ban by packing their phone in checked luggage are “increasing the risk of a catastrophic incident,” the agencies said in a press release. Anyone violating the ban could face criminal prosecution and fines.
Samsung said it is cooperating with the ban. The company is working with airlines to communicate the ban, a spokeswoman said by email. “Any Galaxy Note7 owner should visit their carrier and retail store to participate in the U.S. Note7 refund and exchange program now,” she added by email. “We realize this is an inconvenience but your safety has to remain our top priority.”
Samsung started selling the phone in the U.S. in August, and users almost immediately reported exploding devices. In early September, the FAA advised owners not to turn on or charge their devices on flights.
Samsung has twice recalled the devices, but some replaced phones have caught fire as well. The company stopped selling the phone earlier this week. Some owners have hung onto their devices, however.
“The fire hazard with the original Note7 and with the replacement Note7 is simply too great for anyone to risk it and not respond to this official recall,” Elliot Kaye, chairman of the Consumer Product Safety Commission, said in a press release. “I would like to remind consumers once again to take advantage of the remedies offered, including a full refund. It’s the right thing to do and the safest thing to do.”
Samsung Electronics has begun offering financial incentives for U.S. and South Korea customers who turn in their Note 7s for other products or refund them, as the tech giant scrambles to shore up its reputation in the wake of a damaging safety crisis.
The consumer electronics company is also expanding a U.S. recall of the fire-prone model to a total 1.9 million Note 7 phones, which includes the 1 million Galaxy Note 7s it recalled on Sept. 15.
The South Korean giant is in damage-control mode as rivals like Apple Inc and LG Electronics try to steal market share from the global smartphone leader after it was forced to scrap its latest high-end device.
Samsung is boosting its marketing and promotional efforts around other Galaxy-series smartphones to cushion the blow from the demise of the premium Note 7, which it finally abandoned this week after failing to resolve overheating problems which caused some of the phones to ignite.
Samsung said on Thursday it is offering up to $100 in bill credit to consumers who exchange their Note 7s for any Samsung smartphone in the U.S.
U.S. customers who exchange their Note 7s for a refund or other branded smartphone will receive $25 in bill credit.
“We appreciate the patience of our consumers, carriers and retail partners for carrying the burden during these challenging times,” said Tim Baxter, president and chief operating officer, Samsung Electronics America.
“We are committed to doing everything we can to make this right.”
The U.S. Consumer Product Safety Commission said on Thursday the Note 7’s “battery can overheat and catch fire, posing serious fire and burn hazard to consumers.”
It added that Samsung has received 96 reports of batteries in Note 7 phones overheating in the U.S., including 23 new reports since the Sept. 15 recall announcement.
In the U.S., Samsung began sending fireproof boxes and protective gloves to customers returning potentially explosive Note 7s, drawing humorous barbs from social media commentators.
The company has commenced offering similar financial incentives in its home market of South Korea, which it says would compensate consumers for their “big inconvenience.”
After days of heavy losses, Samsung’s shares ended 1.4 percent higher on Thursday while the broader market fell 0.9 percent.
On Wednesday, the firm slashed its quarterly profit estimate by $2.3 billion to reflect the impact of the Note 7 withdrawal, giving some investors hope that the financial cost of the debacle had been largely accounted for.
“We are confident the 3Q 16 re-statement puts to bed the direct financial impact of the Note 7 recall and termination,” UBS said in a report.
“In the near-term, we believe investors will re-focus on shareholders returns ahead of full 3Q results Oct 27th.”
Samsung Electronics Co cut its quarterly profit estimate by a third on Wednesday, absorbing a $2.3 billion hit from ditching its flagship smartphone in what could be one of the costliest product safety failures in tech history.
Quantifying the financial pain of Tuesday’s move to scrap the Galaxy Note 7 smartphone after a global recall and weeks of mounting problems, the world’s top smartphone maker said it expects its July-September operating profit was 5.2 trillion won ($4.7 billion), down from the 7.8 trillion won it estimated five days ago.
Samsung said in a statement the 2.6 trillion won ($2.3 billion) guidance cut reflects the sales and earning impact it currently expects from the decision to permanently halt sales of the $882 Note 7 device. Its third-quarter revenue estimate was also cut to 47 trillion won from 49 trillion won previously.
The new earnings guidance is 30 percent below third-quarter 2015’s operating profit, and left investors and analysts pondering the longer impact on Samsung’s brand and earnings. Rival suppliers of smartphones that use the Android operating system, like Samsung’s, stand to benefit if the Note 7 damage drive consumers elsewhere.
“It’s possible there could be additional profit impact in the fourth quarter but it likely won’t be as large as the third quarter,” said Park Jung-hoon, a fund manager at HDC Asset Management, which owns shares in Samsung. “I think it’s possible for fourth-quarter profits to come in as much as the high 7 trillion won range.”
Samsung shares ended down 0.7 percent on Wednesday, with the Seoul market closing before the earnings guidance cut was announced.