The fire-prone batteries in Samsung's Galaxy Note7 ultimately cost the company $2.3 billion in operating profit and $1.8 billion in sales, in perhaps the largest tech product failure of 2016.
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. And when replacement phones faced similar overheating problems, Samsung ended sales and production of the phones all together. Galaxy Note7s are currently banned on most major airlines worldwide.
Despite the Note7's public debacle, TechRepublic's CIO Jury remains confident in using Samsung products for business.
When asked "Does the failure of the Galaxy Note7 make you question integrating Samsung products into the enterprise?", 10 of our IT executive panelists said no, while two said yes.
"We've been using them for years without issue," said David Wilson, director of IT services at VectorCSP. "It's one device."
Michael Hanken, vice president of IT at Multiquip Inc., agreed. "Even though they reacted poorly, I don't believe that is a reflection of their overall capabilities," he said.
Samsung is not the only tech company to ever experience a setback like this, said Dan Gallivan, director of information technology at Payette, citing Intel's Pentium processor calculation flaws. "Samsung appears to be responding to the issue, it's rare in its occurrence, and not with all models," Gallivan said. "I still trust using their products."
David Baker, CTO of Fringe Benefit Group, said the Note7 debacle does not make him distrust the company in general. "What it does cause me to question is Samsung's ability to manage quality control for certain products and find workable, corrective solutions to continue valued product lines," Baker said. "For those on the outside, Samsung's inability to manage this situation and move to bail from the entire product line indicates a lack of vision and/or support by seasoned management and technical expertise."
While the Note7 problem is a huge brand hit to Samsung, Michael Spears, CIO and chief data officer of the National Council on Compensation Insurance, said he will take mobile device usage case by case for his business. "The key driver for enterprise acceptance should be focused on control through mobile device management (MDM) tools on the market," Spears said. "For Samsung, that may limit acceptance to devices with KNOX support in the near future. If device quality issues continue, that may change the thinking too."
However, for Keith Golden, CIO of Econolite Group Inc., the Galaxy Note7 incident reassures him that using other providers in the enterprise is the right choice. "We are an iPhone/iOS shop now, and the Galaxy Note7 issues are just another reason for us to stay that way," Golden said.
In Australia, this smartphone incident comes on the back of several fires that occurred in Samsung washing machines and a subsequent recall, said Andrew Paton, group manager of IT services at Rondo Building Services, who was not a member of the CIO Jury. In one case a replacement machine caught fire, raising concerns of whether or not the company clearly understood which units were at fault, Paton said.
"It would seem in this case that their response has been swift and comprehensive, but I'll hazard a guess that this relates more to a flawed design and technical advice, so it cannot simply be corrected by swapping components out," Paton said.
While his company does not use Samsung products other than computer monitors, the Galaxy Note7 incident should not deter enterprise users, Paton said. "A number of vendors at different times that have had battery recalls of one description or another," he said, including IBM, Dell, and HP. "The speed at which technology is changing and the pressure to bring new products to market, in a highly competitive market, doesn't help."
This month's CIO Jury was:
- Simon Johns, IT director, Sheppard Robson Architects LLP
- Dan Gallivan, director of information technology, Payette
- David Wilson, director of IT services, VectorCSP
- Mike S. Ferris, global IT director of infrastructure, Lincoln Electric
- Eric Panknin, IT manager, DMJ & Co.
- Mark O'Brien, CTO, Kurado Inc.
- Michael Spears, CIO and chief data officer, National Council on Compensation Insurance
- Michael Hanken, vice president of IT, Multiquip Inc.
- David Baker, CTO, Fringe Benefit Group
- Lance Taylor-Warren, CIO, Community Health Alliance
- Keith Golden, CIO, Econolite Group Inc.
- Florentin Albu, CIO, Ofgem E-Serve
Want to be part of TechRepublic's CIO Jury and have your say on the top issues for IT decision makers? If you are a CIO, CTO, IT director, or equivalent at a large or small company, working in the private sector or in government, and you want to join TechRepublic's CIO Jury pool, click the Contact link below or email me, alison dot denisco at cbsinteractive dot com, and send your name, title, company, location, and email address.
- US government officially recalls Samsung Galaxy Note7 over battery concerns (TechRepublic)
- Samsung cuts profit forecast by $2.3 billion after Galaxy Note 7 saga(ZDNet)
- Galaxy Note 7, RIP. Samsung, you've got to rebuild the trust (CNET)
- Who's benefitting from the Samsung Galaxy Note 7 meltdown? (ZDNet)
- Samsung's crazy return kit for the Galaxy Note 7 may scare you (CNET)
Alison DeNisco Rayome has nothing to disclose. She does not hold investments in the technology companies she covers.
Alison DeNisco Rayome is a Staff Writer for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.