Samsung Electronics (KRX:005930) of Korea has asked users of the Galaxy Note 7 to turn off their smartphones till the time the company completes its investigations of the device catching fire. 2.5 million of these phones had to be recalled recently, after several complaints of their batteries exploding.
The South Korean electronics business started issuing replacements and assured everyone that all replacement devices are safe. However, there are reports that even the replaced phones are catching fire, sparking fear among the users.
A person in the state of Kentucky reported seeing a lot of smoke in his bedroom on waking up. It was from a replaced Galaxy Note 7. Earlier, a domestic US flight had to be evacuated when smoke was seen emitting from a device in the cabin.
Samsung Stops Selling the Smartphone
Samsung Electronics promptly asked all retail partners and carriers to stop selling the phone globally. The company issued a statement saying, “Because consumers’ safety remains our top priority”. They also ordered investigation on why these incidents were happening.
The issue is critical for Samsung (KRX:005930), and it comes at a wrong time, as the business has been making a comeback of sorts recently. The Korean giant is facing growing competition from a number of other players. This product fault could prove catastrophic for the company and damage their competitive position seriously. Many analysts are saying that for Samsung, the situation is getting “very serious”.
This can hamper the brand’s reputation and bring down the sale of their other products. Earlier, there were reports that the Samsung washing machines were exploding as well. All these machines were manufactured between March 2011 and April 2016. Lawsuits too have been filed against the business.
Samsung Stops Note 7 Production
Meanwhile, the company also disclosed that they were halting the production of the smartphone. Production was stopped after talks with safety regulators. Newspapers in Korea had earlier mentioned that this was a possibility.
They issued a statement saying that “Samsung is adjusting the production schedule to ensure quality and safety matters”.
What is causing these explosions? It could be because of device overheating that is caused by a manufacturing error in the battery, according to some people. However, there is no clear verdict on this yet. Samsung says they will work with the US Consumer Product Safety Commission or CPSC to address the problem quickly and ensure consumer safety, which is always a top priority.