Sam­sung shares plunge over ex­plo­sion de­ba­cle

The Myanmar Times - - International Business -

SAM­SUNG shares plunged yes­ter­day af­ter the South Korean elec­tron­ics gi­ant urged users to stop us­ing its Galaxy Note 7 smart­phone due to a spate of ex­plod­ing bat­ter­ies.

Sam­sung – the world’s largest smart­phone maker – an­nounced on Septem­ber 2 a re­call of its over­sized “ph­ablet” af­ter faulty bat­ter­ies caused some hand­sets to burst into flames dur­ing charg­ing.

Since then, air­lines and air safety agen­cies around the world have warned pas­sen­gers against us­ing them on flights.

The US Con­sumer Prod­uct Safety Com­mis­sion last week urged Note 7 own­ers to stop us­ing the de­vice un­til the bat­ter­ies were re­placed.

As con­cern grew over the bat­tery catch­ing fire, with more cases re­ported last week, Sam­sung has es­ca­lated its warn­ing, telling Note 7 users around the world to im­me­di­ately turn the de­vice off.

Sam­sung has told South Korean con­sumers to use re­place­ment phones which it would pro­vide on a tem­po­rary loan un­til a new Galaxy Note 7 equipped with fault-free bat­ter­ies is avail­able.

Shares in the firm – South Korea’s largest by value – dropped 7 per­cent to close at 1.46 mil­lion won (US$1318) on the Seoul stock mar­ket – the low­est in two months.

“The whole sit­u­a­tion over Sam­sung is be­com­ing more se­ri­ous and com­pli­cated as more state au­thor­i­ties around the world are ad­vis­ing na­tion­als to stop us­ing the Note 7,” said Hwang Min-Sung, an­a­lyst at Sam­sung Se­cu­ri­ties.

The fall­out from the re­call – which in­volves 2.5 mil­lion hand­sets sold so far in 10 coun­tries – may slash the firm’s profit later this year by more than 1 tril­lion won, he warned.

The re­call – the first in­volv­ing Sam­sung’s flag­ship smart­phone – dealt a ma­jor blow to the firm’s rep­u­ta­tion at a time when it faces a grow­ing chal­lenge in all mar­ket seg­ments.

Sam­sung, in­creas­ingly squeezed by Ap­ple’s iPhone in the high-end mar­ket and Chi­nese ri­vals in the low-end seg­ment, launched the Note 7 ear­lier than ex­pected – ahead of the Septem­ber 7 launch of the iPhone 7. –

Photo: AFP

A woman walks past bill­boards of Sam­sung Galaxy Note 7 (left) and Galaxy S7 at a mo­bile phone shop in Seoul yes­ter­day. Sam­sung shares plunged af­ter the South Korean elec­tron­ics gi­ant urged users to stop us­ing its Galaxy Note 7 smart­phone due to a spate of ex­plod­ing bat­ter­ies that raised alarm around the world.

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