Things are not looking good for Samsung following Galaxy Note smoke & fire Issues
Share prices have fallen and mobile carriers in the US and Australia are suspending sales of the phone after reports of replacement phones catching fire
Samsung’s Galaxy Note 7 crisis is only getting worse, after more reports emerge of the South Korean company’s smartphone catching fire. Production of the device has apparently been temporarily halted.
In September, Samsung was forced to suspend sales of the new phablet after reports that batteries were “exploding” and catching fire while in the hands of users, just days before the phone’s UK release. At the time, Samsung said the devices were burning up due to an “isolated battery cell issue”.
The tech giant ordered a global recall of at least 2.5 million devices, with hopes that this would be the end of the crisis. It assured customers that the fixed devices were safe.
However, last week a replacement Note 7 began emitting smoke on a US plane. A Southwest Airlines Co flight to Baltimore was evacuated on Wednesday after the phone started emitting smoke while the plane was at the boarding gate. The plane was evacuated and no injuries were reported.
The wife of the owner of the phone, Sarah Green, told Reuters that her husband had replaced the device a few weeks before, after getting a text message from Samsung.
According to South Korean news agency Yonhap, the company has decided to temporarily halt production of the smartphone after talks with safety regulators as the replacement handsets also pose a significant fire risk and health and safety issue.
However, in a statement released by the company today it simply said it will move quickly to investigate the reported case and work with the US Consumer Product Safety Commission (CPSC).
“We remain in close contact with the CPSC throughout this process. If we conclude a safety issue exists, we will work with the CPSC to take immediate steps to address the situation,” said Samsung.
Samsung’s reputation as an innovative tech company has suffered since the first announcements of the faulty batteries. This comes at a particularly crucial time in the smartphone market as Apple recently announced its new iPhone 7 range and Google has revealed it is making its own smartphones, the Google Pixel, in-house for the first time. Samsung’s credibility as a smartphone pioneer will be adversely affected in this increasingly competitive market.
It’s not only reputations that have been affected at Samsung. Analysts have estimated that the first recall will have cost the company between $1 billion (£805 million) and $2bn (£1.61bn), due to the cost of replacing the phones and falls in the South Korean company’s share price. After the initial reports of exploding phones in September, the Wall Street Journal reported that investors wiped more than $10bn (£8.05bn) off the Samsung Electronics Co. share price.
Shares in Samsung closed down 1.5 per cent in Seoul recently in reaction to the on-going saga.
This is only set to continue as Australian and US mobile carriers have also suspended sales of the device. A spokesperson for AT&T stated: “Based on recent reports, we’re no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents. We still encourage customers with a recalled Note 7 to visit an AT&T location to exchange that device for another Samsung smartphone or other smartphone of their choice.”
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– Amelia Heathman
