Samsung woes deepen over Note 7
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. –