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Oversized Batteries & Manufacturing Problems Killed Note 7, Offical Report Monday

A combination of irregular sized batteries and manufacturing problems, was the root cause of the Samsung Galaxy Note 7 failure. The problems are tipped to cost Samsung over $5 Billion.

At midday, tomorrow in Sydney, Samsung Australia will deliver the report on exactly what went wrong with what has become one of the biggest recalls of a smartphone in Australia.

The reported is expected to reveal that some batteries were irregularly sized, causing overheating, while others were not manufactured properly in Samsung factories.

Even a move to a Chinese source failed to fix the problem due to problems with the size of the batteries.

The report will help to explain the technology giant’s product recall that damaged its brand in the short term.

Analysts are tipping that the brand long term will not be affected.

Samsung, the world’s largest smartphone maker by shipments, conducted the investigation with three quality-control and supply-chain analysis firms that it hired to help it in its independent investigation. Samsung recalled all its 2.5 million Galaxy Note 7 smartphones last fall after consumer complaints that the phones caught fire, leading a U.S. regulator to ban the use of the device on airplanes.

The Galaxy Note 7, which Samsung began selling in August, carried batteries supplied either by Samsung SDI Co., an affiliate, or Hong Kong-based Amperex Technology Ltd., which produces them at a factory in China. Initially, Samsung officials believed the problem was confined to batteries made by the Samsung affiliate, and recalled those devices while ramping up production of smartphones carrying the Chinese batteries to replace the recalled phones.

But continued reports of overheating replacement phones forced Samsung to issue a second recall in early October, pulling the plug entirely on the premium devices.

The recall saw the U.S. Federal Aviation Administration and Australian Aviation Authorities issues a warning urging airline passengers to avoid using Galaxy Note 7 phones on planes.

Samsung lost more than $10 billion in market value after the FAA warning.

Recently the The U.S. FAA said that U.S. airlines will no longer be required to make a pre-boarding notification to passengers that the Samsung Galaxy Note 7 phone is prohibited from transport on aircraft.

Samsung’s report on Monday will conclude that the issue with the batteries from Samsung SDI was an irregularly sized battery that didn’t fit properly in the phone, according to the people, who said that the incongruence caused the overheating. In the Galaxy Note 7 phones carrying batteries made by ATL, the flaw centers on a manufacturing issue resulting from the quick ramp-up in production of replacement phones, these people said. It wasn’t clear what the manufacturing issues were.

ATL and Samsung SDI declined to comment.