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October 11, 2016

Goodbye Galaxy Note 7: Samsung ends production of exploding smartphone

Since 10 October, Samsung’s share price has fallen 8 percent.

By Alexander Sword

Samsung permanently discontinued production of Galaxy Note 7 devices as it sought to contain damage from the malfunctioning devices.

The move comes a day after asking all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while undertaking an investigation alongside regulatory authorities.

Samsung advised consumers with either the original Galaxy Note7 or a replacement device to power down, stop using the device and “take advantage of the remedies available”.

samsung-galaxy-note-7-4The company said that it “remain(ed) committed to working diligently with appropriate regulatory authorities to take all necessary steps to resolve the situation.”

Since 10 October, Samsung’s share price has fallen 8 percent.

The latest generation of Samsung’s flagship large smartphone line, Note 7 devices have been overheating when charging. In many cases they have got so hot that they have melted or caught fire.

Samsung issued a voluntary recall for its Galaxy Note7 devices in September after 35 cases of the device overheating or catching fire were reported. A week later, it asked Galaxy Note7 users in South Korea to immediately switch off their phones and exchange them as soon as possible. It sought to limit the charges on phones by issuing a software update.

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Since then, though, devices that had been replaced faced similar issues, suggesting that the recall had been ineffective and necessitating more drastic measures.

Note 7

The failure of the device may impact on the perception of Samsung’s brand.

Vijay Michalik, Research Analyst, Digital Transformation, Frost & Sullivan, said that “damage control at Samsung will face an uphill battle to redeem the company’s tarnished image owing to the dangerous and dramatic nature of the phone’s failure.”

He said: “While its smartphone lineup stretches from the high end Galaxy 7 line to mid-range handsets, the knock-on impact of the failure of a flagship phone will be significant.”

Samsung had been enjoying a recovery in its mobile business due to high sales of the Galaxy S7 device.

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