grand master of the ruling dynasty’s palace court, an office called the
Future Strategy Office (FSO) that acted as disciplinarian for the myriad
business units.
“The Tower is watching, the Tower is watching,” a former vice
president once put it to me, using the internal nickname for Samsung’s
circle of tight-knit leaders, many from the Future Strategy Office.
Vice Chairman Choi and D.J. met in D.J.’s office in a building called
R5 at the Suwon campus, where they examined a laboratory report
containing X-ray and CT scans of Galaxy Note 7s, as they set out to
determine the cause of the fires. The scans showed Samsung SDI’s battery
had a protruding bulge through the casing, as well as heat damage to the
battery’s internal structure. They could see no bulge in the phones powered
by batteries from the other supplier, Amperex.
“It wasn’t a definitive answer,” reported The Wall Street Journal. But
with customers complaining and carriers demanding answers, Koh thought
they had enough information to act. They pinned the blame on Samsung’s
battery supplier for manufacturing a faulty component and instigated a
sweeping recall.
On September 2, two weeks after the Galaxy Note 7’s release, D.J.
entered a conference room to flashing media cameras for a grim press
conference. He bowed deeply, a Korean act of apology.
“By putting our top priority on customer safety,” he said, “we’ve
decided to halt sales of the Galaxy Note 7 and offer new replacement
handsets to all customers, no matter when they bought it.”
The Galaxy Note 7, the shining light of the Samsung empire, was now
its greatest disaster. Of the 2.5 million Note 7s on the market, Samsung
was set to recall an estimated 1 million phones that used the Samsung SDI
battery. But as it turned out, not everyone was satisfied with Samsung’s
conclusion. Samsung had told The Wall Street Journal that the phones with
Amperex batteries, used in China and elsewhere, were safe. Yet consumers
in China were reporting fires in those phones, too. Samsung dismissed
those reports as fake, citing its own laboratory tests.
The half measure left people scratching their heads. “It wasn’t a recall
at all, since the company didn’t get the CPSC involved,” wrote Gizmodo’s
Matt Novak.
“Without guidance from the CPSC, other agencies, like the FAA
[Federal Aviation Administration], were paralyzed,” he wrote. “I contacted