Innovación: Samsung scraps Galaxy Note 7 over fire concerns
Samsung Electronics Co Ltd scrapped its flagship Galaxy Note 7 smartphone on Tuesday less than two months after its launch, dealing a huge blow to its reputation and outlook after failing to resolve safety concerns.
Samsung announced the recall of 2.5 million Note 7s in early September following numerous reports of the phones catching fire and on Tuesday it finally pulled the plug on the $882 device in what could be one of the costliest product safety failures in tech history.
The decision to scrap the Note 7 came after fresh reports of fires in replacement devices prompted new warnings from regulators, phone carriers and airlines.
“(We) have decided to halt production and sales of the Galaxy Note 7 in order to consider our consumers’ safety first and foremost,” the South Korean firm said in a filing to the Seoul stock exchange.
Samsung said earlier it asked all global carriers to stop sales of the Note 7s and the exchange of original devices for replacements, while it worked with regulators to investigate the problem. The company is offering to exchange Note 7s for other products or refund them.
Samsung’s decision to pull Note 7s off the shelves not only raises fresh doubts about the firm’s quality control but could result in huge financial and reputational costs.
Analysts say a permanent end to Note 7 sales could cost Samsung up to $17-billion and tarnish its other phone products in the minds of consumers and carriers.
Investors wiped nearly $20-billion off Samsung Electronics’ market value on Tuesday as its shares closed down 8 per cent, their biggest daily percentage decline since 2008.
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