Samsung
halts production of Galaxy Note 7 phone after battery fires –
reports
The
decision reported by South Korean news agency Yonhap follows repeated
problems with the new device
Justin McCurry in
Tokyo
Monday 10 October
2016 04.09 BST
Samsung’s
smartphone recall crisis has deepened after South Korean media said
the tech giant had suspended production of its troubled Galaxy Note 7
model amid reports that replacement devices had caught fire.
Citing an unnamed
source at a Samsung supplier, the news agency Yonhap said the company
on Monday decided to halt production of the smartphone, one of the
most advanced and expensive products of its kind on the market.
The unprecedented
halt in production is another blow to Samsung, which last month
announced the global recall of at least 2.5m Galaxy Note 7
smartphones due to faulty batteries that caused some of the phones to
emit smoke or catch fire.
Social media images
of photographs of charred Note 7 phones have only added to the
humiliation felt by Samsung, an iconic South Korean firm that has
built a reputation for innovation and quality since entering the
consumer electronics market in the late 1960s.
Two US mobile
carriers have said they will stop issuing new Galaxy Note 7
smartphones after recent reports of replacement devices emitting
smoke or bursting into flames.
In one incident,
passengers were evacuated from a Southwest Airlines flight in
Kentucky earlier this week after a replacement Note 7 started
smoldering and making “popping noises” soon after its owner
boarded the plane.
AT&T said on
Sunday it would stop exchanging new Note 7 smartphones due to reports
of fires from replacement devices that Samsung said contained safe
batteries.
T-Mobile said it was
temporarily halting sales and exchanges of new Note 7s. South Korea’s
largest mobile carrier, SK Telecom, said it was monitoring the
situation, while KT Corp, the country’s No.2 carrier, said it had
taken no action on new Note 7 sales or exchanges.
“This measure
includes a Samsung plant in Vietnam that is responsible for global
shipments (of the Galaxy Note 7),” Yonhap quoted the source as
saying.
Samsung has yet to
comment on the Yonhap report.
The latest problem
with the Note 7 will frustrate Samsung’s attempts to repair its
battered reputation and result in severe financial penalties, with
some analysts predicting that the worst recall crisis in the firm’s
history could cost it US$5bn in revenues.
“I thought the
Note 7 matter was coming to an end, but it’s becoming an issue
again,” said CJ Heo, a fund manager at Alpha Asset Management. Heo
said he expected Samsung to recover from short-term damage to its
reputation, but added that the recall crisis would hit fourth-quarter
sales of the Note 7.
Despite the recall,
Samsung said last week that its third-quarter profit rose 6 percent
to about $7bn on total sales of $43.9bn, thanks to income from
Samsung’s other products.
The company sold 76m
smartphones in the second quarter of 2016, most of them lower-priced
models.
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