Sam­sung woes deepen over Note 7

The Myanmar Times - - International Business -

SAM­SUNG Elec­tron­ics took an­other hit yes­ter­day over its re­called Galaxy Note 7 smart­phone, ac­knowl­edg­ing it was “ad­just­ing pro­duc­tion” of the de­vice after ma­jor dis­trib­u­tors stopped of­fer­ing re­place­ments be­cause of con­tin­ued safety con­cerns.

The South Korean elec­tron­ics gi­ant has strug­gled in the wake of its Septem­ber 2 de­ci­sion to is­sue a global re­call for 2.5 mil­lion Note 7s be­cause of com­plaints that the lithium-ion bat­tery ex­ploded while charg­ing.

Over the past week re­ports emerged of re­place­ment units also catch­ing fire, prompt­ing US telecom­mu­ni­ca­tions firm AT&T and Ger­man ri­val T-Mo­bile to halt re­call ex­changes pend­ing in­ves­ti­ga­tions.

Their an­nounce­ment prompted a steep dive in Sam­sung’s share price, which fell more than 4 per­cent at one point in morn­ing trade. It re­cov­ered later to close at 1.68 mil­lion won (US$1515) – down 1.52pc.

The mar­ket was also re­act­ing to a South Korean me­dia re­port that Sam­sung had tem­po­rar­ily shut down Note 7 pro­duc­tion lines after dis­cus­sions with con­sumer safety reg­u­la­tors from South Korea, the United States and China.

“We are in the process of ad­just­ing pro­duc­tion vol­umes,” Sam­sung said in a writ­ten re­sponse to the re­port.

The com­pany said the move was “to en­hance qual­ity con­trol and to en­able thor­ough in­ves­ti­ga­tions of the Galaxy Note 7 ex­plo­sions”.

With im­ages of charred phones flood­ing so­cial me­dia, the un­prece­dented re­call has proved a hu­mil­i­a­tion for a firm that prides it­self as an icon of in­no­va­tion and qual­ity.

“It’s all got very se­ri­ous again,” said SR Kwon, an an­a­lyst at Dongbu Se­cu­ri­ties.

“They could just pull the Note 7 off the mar­ket, but the real con­cern is that it might not even end there. It will dam­age Sam­sung’s brand im­age and also af­fect the sales of other Galaxy smart­phones,” he added.

AT&T is the com­pany’s third-big­gest cus­tomer while T-Mo­bile’s par­ent is num­ber four.

Bryan Ma, vice pres­i­dent of de­vices re­search for IDC, called the lat­est de­vel­op­ment “an on­go­ing night­mare”.

“The ques­tion is, if they switched the [bat­tery] sup­plier, why is this still hap­pen­ing?” Mr Ma said. –

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