Mobility

Samsung ends compensation for some Galaxy Note7 customers, major design flaw emerges

Samsung will not provide additional funds to the 2,400 South Korean customers who filed a class action lawsuit after the two Note7 recalls. Here's why.

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Image: iStockphoto/AndreyPopov

The aftershocks from the Galaxy Note7 exploding phone debacle keep coming: Samsung recently announced that it will not offer any more compensation for Galaxy Note7 users in Korea, other than what it offered during the recall, ZDNet reported.

In October, some 2,400 South Korean consumers filed a class action lawsuit against Samsung, asking for 500,000 won (about $426) each, in compensation for the time and effort spent dealing with the two recalls and ultimate removal of the product. In five additional individual lawsuits filed in the country, plaintiffs claimed they suffered physical harm from the phones igniting. Lawsuits were also filed in the US and Canada, according to reports.

Samsung said it did not have to compensate customers who received a new device after the Note7 recall, according to court documents.

"We gave enough compensations and benefits to Note 7 consumers. The damages consumers are claiming are within the range that is endurable," Samsung said, according to the Korea Herald.

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The company had previously given South Korean customers a 100,000 won ($85) mobile coupon, as well as the option to upgrade to the upcoming Galaxy S8 at half the price.

A quick recap of the Note7 saga: When the smartphone launched in August with its retina scanner and language conversion features, many called it "ideal for users in the enterprise." But several reports of the phone's batteries catching fire led Samsung to recall the phones in September. When replacement phones faced similar overheating problems, Samsung ended sales and production of the phones altogether in October. Galaxy Note7s are currently banned on most major airlines worldwide.

Along with the lawsuit response from Samsung, manufacturing technology company Instrumental.ai recently did a teardown of the Note7 (with a fire extinguisher nearby) to examine the phone's design. The team found that the phone's engineering compressed the battery even during normal operation. Any added pressure from battery expansion or stress on the phone's body (such as from sitting on it while it's in your back pocket) could squeeze together the layers inside the battery, and lead to an explosion.

"Looking at the design, Samsung engineers were clearly trying to balance the risk of a super-aggressive manufacturing process to maximize capacity, while attempting to protect it internally," Instrumental.ai's CEO Anna Shedletsky wrote in a blog post about the teardown.

"It's possible that Samsung's innovative battery manufacturing process was changing throughout development, and that the newest versions of the batteries weren't tested with the same rigor as the first samples," Shedletsky wrote in the post.

Despite the Note7 recalls, 10 out of 12 IT professionals said they still trust Samsung products in the enterprise, according to a TechRepublic CIO Jury poll.

The 3 big takeaways for TechRepublic readers

  1. Samsung said it will not provide any more compensation for South Korea customers who filed a class action lawsuit after purchasing the recalled Galaxy Note7 smartphones.
  2. The company had previously given South Korean customers a 100,000 won ($85) mobile coupon, as well as the option to upgrade to the upcoming Galaxy S8 at half the price, in exchange for the troubles of returning the Note7 phones.
  3. A recent teardown of the phone from Instrumental.ai uncovered a design flaw that compressed the battery and likely led to the phones catching fire.

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About Alison DeNisco

Alison DeNisco is a Staff Writer for TechRepublic. She covers CXO and the convergence of tech and the workplace.

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