• Samsung Ends Production and Halts Sales of Note 7 After Global Recall and New Fire

    Posted on October 12th, 2016 Yuson Zou | No comments

    The South Korea’s largest company, Samsung Electronics Co. has announced that it is ending production of its problematic Galaxy Note 7 smartphones, taking the drastic step of killing off Note 7.

    Debuted on August 19, 2016, Note 7 was reported to catch fire automatically. Thus at the start of last month, Samsung had recalled the fire-prone device after early models exploded and the latest move comes after customers reported that replacement phones were also catching fire. Samsung will be without its highest-end smartphone that was supposed to compete against Apple Inc.’s iPhones and other premium devices during the holiday shopping season.

    Samsung originally blamed one battery supplier for the problems and switched to an alternative company, but that did not end the problems.

    “Samsung needs to act swiftly and move on to protect their brand image,” said Mark Newman, an analyst with Sanford C. Bernstein in Hong Kong.

    Samsung Electronics shares fell 8 percent in Seoul Tuesday, wiping out about $17 billion of market value, before the Note 7 termination was announced. The stock dropped further in London trading after the news, sliding as much as 9.9 percent.

    The company has not said how many new or replacement phones will be affected by the latest announcement. Analysts estimated the original recall would cost between $1 billion and $2 billion, but that figure will now certainly rise. Chung Chang Won, an analyst at Nomura Holdings Inc., estimated in a research note before the company’s announcement the worst-case scenario of Samsung terminating the Note 7 would cost the company about $5 billion in operating profit through 2017.

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    42 responses to “Samsung Ends Production and Halts Sales of Note 7 After Global Recall and New Fire” RSS icon

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