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Nothing wrong with the phones, it was all in the battery - Samsung | :00:00. | :00:26. | |
explains the reason why the Galaxy Note mobile phones caught fire and | :00:27. | :00:31. | |
were recalled. The UK government to outline the industrial strategy. | :00:32. | :00:35. | |
But with Brexit looming large, where will any government money go? | :00:36. | :00:39. | |
Also in the programme: iPhone maker Foxconn signals $7 billion | :00:40. | :00:45. | |
Korean electronics giant Samsung has released the results | :00:46. | :01:00. | |
of its investigation into its flagship Galaxy Note 7 smartphones. | :01:01. | :01:03. | |
In October last year the phones were recalled because some had | :01:04. | :01:06. | |
The company today confirmed problems with the design saying | :01:07. | :01:15. | |
the manufacturing of batteries was to blame, not the actual phones. | :01:16. | :01:19. | |
The Note 7 was supposed to rival Apple's iPhone 7 but instead, | :01:20. | :01:22. | |
the device caused massive damage to the company's profits, | :01:23. | :01:25. | |
Last year, over 100 of the phones spontaneously burst into flames. | :01:26. | :01:37. | |
This forced Samsung to halt production and recall millions | :01:38. | :01:40. | |
globally months before the all important Christmas sales period. | :01:41. | :01:43. | |
The debacle almost entirely wiped out the company's mobile business | :01:44. | :01:46. | |
profit in the third quarter of last year, | :01:47. | :01:48. | |
And this dragged total profits at the company down by 30%, | :01:49. | :01:53. | |
Samsung itself predicted another three billion dollars could be wiped | :01:54. | :02:00. | |
off profits over the next two quarters. | :02:01. | :02:08. | |
The total cost of the recall has been estimated at around | :02:09. | :02:11. | |
$5.3 billion, but the damage to the company's | :02:12. | :02:13. | |
This is how one of the independent external experts that has helped | :02:14. | :02:23. | |
Samsung find the cause of the fires summed it up. | :02:24. | :02:31. | |
We need additional analysis to understand the root cause of the | :02:32. | :02:37. | |
damage to the edge or corner of the battery which results in internal | :02:38. | :02:45. | |
issues at that location. In summary design and manufacturing issues with | :02:46. | :02:51. | |
the batteries led to failures of the devices. | :02:52. | :02:52. | |
With me is Daniel Gleeson, Consumer Technology Analyst at Ovum. | :02:53. | :02:55. | |
Good morning. Good to see you. So that was the big press conference | :02:56. | :03:02. | |
that happened today. Give us more on where they went wrong. While it is | :03:03. | :03:06. | |
good news for Samsung that it wasn't their own design that was the | :03:07. | :03:10. | |
problem it was a problem on their behalf that they didn't do enough | :03:11. | :03:15. | |
testing of the Note 7 and after they caught the problem and switched | :03:16. | :03:18. | |
battery suppliers they asked the new supplier to go too fast too quickly | :03:19. | :03:24. | |
and a whole new set of problems occurred with this new supplier. So | :03:25. | :03:29. | |
there are a lot of lessons to be learned for other manufacturers as | :03:30. | :03:32. | |
well as we try to shrink phones and pressure the batteries about how to | :03:33. | :03:38. | |
design and test those issues. It was almost like the race was on to get | :03:39. | :03:42. | |
this phone out there at the same time as the apple iPhone 7 and also | :03:43. | :03:47. | |
Google launching its phone as well, there is so much competition right | :03:48. | :03:51. | |
now that perhaps there I was off some of the detail. Exactly, and | :03:52. | :03:55. | |
especially the last two or three months of the year are so important | :03:56. | :03:59. | |
for any consumer device sales obviously with black Monday in the | :04:00. | :04:04. | |
US leading into Christmas and most of the western world leading into | :04:05. | :04:08. | |
the Chinese New Year at this time of year. So, what now, they have set as | :04:09. | :04:12. | |
well today that they are not going to be launching their next news | :04:13. | :04:17. | |
Samsung smartphone in February at the big mobile phone conference in | :04:18. | :04:21. | |
Spain, which was expected. So, what now? Yes, the Galaxy S8, which we | :04:22. | :04:27. | |
expected at the end of February we won't see until April, which gives a | :04:28. | :04:34. | |
big window of opportunity for Sony, HTC, Huawei, launching flagship | :04:35. | :04:38. | |
phones in the next month or two to make an impact on the market. For | :04:39. | :04:42. | |
Samsung it was them in a difficult position because they are in a | :04:43. | :04:45. | |
non-traditional launch window but I guarantee they will come to the | :04:46. | :04:51. | |
market with the S8 and not only will it be very well-prepared and tested | :04:52. | :04:55. | |
but they will come with millions of marketing to try to overcome the | :04:56. | :04:59. | |
brand damage. How damaging has it been, how put off are we when it | :05:00. | :05:03. | |
comes to buying a Samsung, are we keeping Samsung for the time being, | :05:04. | :05:10. | |
our people staying loyal? I think with most controversies with mobile | :05:11. | :05:18. | |
phones, it stuck in people's mind, it was a protracted recalled, that | :05:19. | :05:24. | |
really pushed it into the public consciousness, the butt of | :05:25. | :05:27. | |
late-night jokes on American TV networks, it was all over social | :05:28. | :05:31. | |
media, so I think because of that it is a kind of issue that will stick | :05:32. | :05:35. | |
with consumers for several months and will impact on a lot of | :05:36. | :05:40. | |
decision-making. Ultimately I think Samsung can recover if they invest | :05:41. | :05:44. | |
heavily enough into their market. And if nothing goes wrong again in | :05:45. | :05:48. | |
future, you would imagine. Thank you for your time this morning. And | :05:49. | :05:52. | |
there is much more detail on the story on the website, as with this | :05:53. | :05:56. | |
story too, which we will discuss next. | :05:57. | :05:57. | |
Foxconn, one Apple's biggest suppliers based in Taiwan, | :05:58. | :05:59. | |
has confirmed it's considering setting up a display-making plant | :06:00. | :06:01. | |
Sharanjit Leyl is in our Asia Business hub in Singapore. | :06:02. | :06:10. | |
Interesting announcement from Foxconn? Indeed it is, and it was | :06:11. | :06:21. | |
from none other than the chief executive Terry Go, part of Taiwan's | :06:22. | :06:27. | |
technology giant Foxconn, basically confirming they are to set up a | :06:28. | :06:33. | |
plant in the US, with Mr Go saying it might exceed $7 billion. It is a | :06:34. | :06:40. | |
major supplier of apple and a likely generate thousands of jobs for the | :06:41. | :06:45. | |
US, if it does indeed go ahead and the plans come after US President | :06:46. | :06:49. | |
Donald Trump confirmed his America first agenda which is meant to | :06:50. | :06:55. | |
overturn international trade treaties, which he said during his | :06:56. | :06:59. | |
inaugural speech on Friday and during his campaign. Since his | :07:00. | :07:03. | |
election he repeatedly threatened high import tariffs in order to try | :07:04. | :07:09. | |
to encourage US as well as foreign companies to improve production in | :07:10. | :07:13. | |
the United States and he singled out China as a significant cause of loss | :07:14. | :07:18. | |
of manufacturing jobs in the United States. As we know, Foxconn doesn't | :07:19. | :07:23. | |
just manufacture for Apple but for other global giants as well. It is | :07:24. | :07:30. | |
formally known as Honhai Position and has most of its factories in | :07:31. | :07:33. | |
China, where it assembles its iPhone. Very interesting. Thank you. | :07:34. | :07:35. | |
See you soon. The UK Prime Minister Theresa May | :07:36. | :07:37. | |
will today launch the government's vision for an industrial | :07:38. | :07:41. | |
strategy for Britain. Our Industry correspondent | :07:42. | :07:43. | |
John Moylan talks us through what the government | :07:44. | :07:44. | |
is likely to announce. How can the government ensure the | :07:45. | :07:52. | |
economy is fit for the future? For the Business Secretary Greg Clark | :07:53. | :07:57. | |
places like this are part of the answer, it is a new automotive | :07:58. | :08:02. | |
innovation centre in Warwick backed by government industry money and | :08:03. | :08:09. | |
designed to keep carmakers firing on all cylinders. One of the things | :08:10. | :08:12. | |
with industrial strategy is to build on the great success and also to | :08:13. | :08:17. | |
help make sure that we drive growth in all parts of the country. The | :08:18. | :08:22. | |
industrial strategy will be committed to driving very hard to | :08:23. | :08:25. | |
spread the opportunities right across the country and to drive not | :08:26. | :08:31. | |
just jobs but really good well-paid jobs in all parts of the country. It | :08:32. | :08:36. | |
is going to be a big part of the strategy. Today the strategy will be | :08:37. | :08:42. | |
outlined in a new green paper aimed at kickstarting wide-ranging | :08:43. | :08:46. | |
consultation on the government's new vision, including plans for sector | :08:47. | :08:50. | |
deals where businesses and stakeholders in specific sectors can | :08:51. | :08:53. | |
make the case for government support. That is just one of ten | :08:54. | :08:57. | |
so-called strategic pillars which are all designed to increase | :08:58. | :09:02. | |
productivity and drive growth. In the past, governments used | :09:03. | :09:06. | |
industrial strategies as an excuse to back key firms or industries. It | :09:07. | :09:10. | |
didn't always work. As we prepare for the challenges of leaving the EU | :09:11. | :09:17. | |
the big test of this plan will be that it doesn't just deliver for | :09:18. | :09:20. | |
successful firms like this but that it reaches out to all parts of the | :09:21. | :09:25. | |
UK to deliver the government's aim of an economy that works for | :09:26. | :09:26. | |
everyone. United Airlines says in a statement | :09:27. | :09:29. | |
it grounded all domestic flights You might have noticed if you try to | :09:30. | :09:32. | |
fly on Sunday. It did not give any more details, | :09:33. | :09:39. | |
and it was not immediately clear how The Chicago-based Airline | :09:40. | :09:43. | |
and United Express operate more than 4,500 flights a day to 339 | :09:44. | :09:47. | |
airports across five continents. So, let's hope they have fixed that | :09:48. | :10:01. | |
problem. Looking at market very quickly and we have a stronger yen, | :10:02. | :10:05. | |
the dollar falling in value, affecting Japan, and that is merely | :10:06. | :10:08. | |
because the news out of the new president so far hasn't really been | :10:09. | :10:13. | |
about how to boost growth but more political issues and issues that | :10:14. | :10:16. | |
could cause a must as opposed to host growth and help the world's | :10:17. | :10:21. | |
biggest economy, so disappointment for financial markets so far on the | :10:22. | :10:24. | |
Trump effect for the global economy - that is down for the dollar and up | :10:25. | :10:29. | |
for the yen, which is not helping exporters in Japan. I will see you | :10:30. | :10:31. | |
soon. | :10:32. | :10:34. |