Samsung's speed-first policy is the ultimate cause of Note 7 fires

In Korea, the name of the game is speed. The findings of the Galaxy Note 7 investigation show beyond a doubt that super-fast Samsung needs to slow down and show itself as a mature tech company.

Samsung Electronics is a super-fast company. As the world's largest electronics company by revenue, it can roll out a commercial product from scratch in less than three months to anywhere in the world -- an unmatched feat.

CES 2018

The Big Trends for Business

CES showcases the tech trends that will shape the year ahead. See the most important products that will impact businesses and professionals.

Read More

The root cause of the Galaxy Note 7 fires was faulty batteries, as Samsung announced, but the cause of the faulty batteries themselves, and the more fundamental issue, is the company's speed-first policy.

Consider Samsung SDI's predicament for the Galaxy S6 and S6 Edge two years ago: Samsung, hard-pressed by the relative low popularity of the Galaxy S5, decided to do away with replaceable batteries and go for a unibody.

This forced Samsung SDI, its main supplier, to make pouch cell batteries for the first time commercially, instead of the metallic cylindrical ones it had been making for pre-Galaxy S6 models. Pouch cell battery packs take up less space and were better suited for the unibody design of the S6.

But unlike Japanese and Chinese manufacturers that invested in pouch more aggressively since the method appeared as an alternative in the 90s, Samsung SDI was jumping ship without historical know-how or reference of how to make them.

In hindsight, it's a miracle that the Galaxy S6, Note 5, and Galaxy S7 and S7 Edge, which all used the same pouch cell battery packs, did not face similar problems to the Note 7.

Samsung's investigation shows that inadequate pouch design caused pressing in the upper corners of the battery. So the cause is Samsung SDI's "inadequate" knowledge of the pouch cell technology that they were using for a commercial product that sold in the millions.

For ATL -- the secondary supplier who took over battery production for the Note 7 after the first recall -- the fault was thin separators and missing insular tapes. These are not fundamental design flaws; rather, they look like defects that happen when manufacturing is forced to speed up under pressure.

So there are two faults here, all related to speed, or rushing the process.

Samsung SDI makes batteries in a large scale where they have only a year of experience in commercial application.

ATL, which has a history of supplying iPhone's pouch cell battery packs (and I've never heard them catching fire), is forced to make them more quickly after the first recall. Understandably, they did not want to miss out on the big profits expected for certain.

Speed has worked in Samsung's favour when it was catching up to Apple. Galaxy made its debut only six months after the failure of its Omnia series, and the Note series allowed the company to quickly find that consumers wanted screens to be bigger. Compatriot LG's current predicament is a result of lack of speed.

Up to a certain point, Samsung's paranoia comes from watching Nokia's demise. However, when the market is so mature, it's very unlikely that a newcomer can overtake you quickly in the same product category -- it seems no longer a viable strategy.

Samsung insiders said that when they stopped being a follower in 2013 and when they cemented their leadership as Android number one, their biggest difficulty, or paranoia, was how to become a leader.

It's a welcome sign that the firm will postpone the Galaxy S8 to after the Mobile World Congress. Samsung is planning to acquire Harman, which will be completed within the year, making it a tier-1 player in car components. It also recently acquired Vivo, which specializes in AI-powered virtual assistants. The Internet of Things is happening, albeit slowly. And Samsung happens to be the leader in almost everything electronics-related, with its semiconductors helping post record fourth quarter profits despite the Note 7 fallout.

Perhaps Samsung should focus more on what the smartphone means in the long-run in the advent age of where everything is connected, and draw up a long-term strategy fitting to its leadership position, slowly and meticulously. People will wait for the leader.