Samsung Electronics halts sales of its Galaxy Note 7 smartphones and tells owners to stop using them while it investigates reports of fires, fuelling expectations the tech giant will scrap the flagship device. Eve Johnson reports.
Can Samsung Note 7 survive second sales halt?
Samsung says for your safety – switch it off and keep it off
The electronics giant on Tuesday…
…pulling the Galaxy Note 7 off shelves for the second time in two months and telling customers to stop using the phone.
The Note 7 was already in the middle of a huge recall….
when reports emerged that the new devices were also catching fire…
(SOUNDBITE) (English) VINCENT LEE, REUTERS REPORTS, SAYING:
“The financial costs right now are being estimated are at over 1 trillion won so somewhere in the billion dollar region for just the third quarter. Now some analysts are saying the financial costs could be even larger than that in the fourth quarter.”
The news has battered Samsung’s stock price…
shares falling five percent after the market’s opening Tuesday.
U.S. and South Korean aviation officials are urging passengers not to use the phones or their replacements on planes…
While some airlines have banned the device altogether…
…after a smoking Note 7 forced the evacuation of a US flight last week
Samsung has recalled two and a half million of the phones…
And says it’s working with regulators to figure out what the battery problem is.
But some warn that the brand won’t be so easy to fix.
(SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING:
“Samsung has made a decision perhaps too late in the day to stop some contagion across the brand. They seem to now be on top of it. It’ll be how they manage the programme from here which will determine the long term future for Samsung and that particular line. I think the Note 7 itself is dead in the water.”
Analysts say that by the time the Note 7 is fixed – Samsung will already be preparing to launch the Galaxy S8
…meaning that it’s looking more and more likely that the company will be cutting its losses.
and scrapping the phone altogether.
For now, it’s offering to exchange all Note 7s for other products or a refund.