Samsung Tells Note 7 Users to Switch Off as Smartphone Crisis Deepens

Patrick Frater
Variety

BUSAN — The crisis afflicting the world’s leading smartphone manufacturer Samsung Electronics turned from bad to worse on Tuesday.

The South Korean giant halted all sales of its troubled flagship smartphone, the Galaxy Note 7, and told existing users to turn off their devices.

After a series of explosions and fires, bans by many airlines, and a product recall in mid-September there is now speculation that Samsung’s top-of-the-line phone model may now be abandoned completely.

[UPDATE, 5:15 a.m. PT: Samsung officially announced later on Tuesday that it will permanently end production of the Galaxy Note 7.]

That prospect sent the company’s shares tumbling 7.5%, to KRW1,554,000 ($1,387.86), on Tuesday, after having staged a partial recovery on Monday.

“Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note 7 while the investigation is taking place… consumers with either an original Galaxy Note 7 or replacement Galaxy Note 7 device should power down and stop using the device and take advantage of the remedies available,” the company said in a statement on its website.

In mid-September the company announced a product recall, having pointed to a problem with the batteries. But a switch to a new battery supplier does not appear to have solved the problem. And many of the supposedly safe replacement phones have also been involved in incidents.

The company is locked in a worldwide battle with Apple for dominance of the global smart-phone market. It launched the Note 7 two months ago.

Reuters quoted financial analysts as suggesting that the Note 7 crisis could cost the company some $17 billion.

 

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