On phones with easily removable batteries, pulling the battery out will force the phone to shut off completely. This will unfreeze a frozen phone even when normal shutdown methods won't work. As with suddenly removing power from any computer, however, pulling out the battery from your phone can potentially cause lost work, damaged files or, at worst, can break the system entirely. With phones such as the iPhone that do not have accessible batteries, you also risk damaging the hardware.
Removing Batteries: Mostly Harmless
Most times you're forced to pull the battery out of an unresponsive phone, you will not suffer any serious side effects. If you were working on a document, you'll lose your changes just as if you turned the phone off without saving. Apart from this, your phone should start back up normally once you replace the battery. If an underlying problem necessitated the battery pull, simply restarting may not permanently solve the issue, but neither will it make it any worse.
Corrupting Your Data
Files actively in use by your phone can suffer corruption due to a sudden power loss. For example, if you're in the middle of downloading an app, you will have to delete it and re-download it after regaining power. If you were transferring files to an SD card when the phone froze, you could potentially lose those files or even the entire contents of the memory card by suddenly cutting power.
Bricking Your System
Cutting power to your phone during system operations, such as a system version update, can corrupt the phone's operating system, "bricking" the device and preventing it from booting. In many cases, you can recover your phone by wiping its memory and reinstalling the OS. In the worst situations, however, your phone can stop working completely and require professional repair.
A Necessary Risk
Though pulling the battery out of your phone does pose a risk, it might also be the only way to restart a completely frozen phone that won't respond to other methods. In such cases, any file corruption you risk probably already occurred when the phone froze. For example, if your only remaining troubleshooting options are pulling the battery or waiting for it to drain naturally, a battery pull does not pose additional risk to your files.
Phones Without Battery Covers
Attempting to remove the battery on a phone without a removable battery cover risks breaking an internal component of your phone. Attempting to pry open the phone may also snap parts of the casing, preventing you from reassembling it. Though it is possible to manually replace the battery in an iPhone or another sealed device, doing so will void your warranty and should only be performed when replacing a battery permanently -- not to perform a reset.
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