Samsung Electronics

Samsung Electronics says to halt Galaxy Note 7 sales on battery problem

Tech giant Samsung Electronics says it will halt the sales of its Galaxy Note 7 smartphones and will prepare replacement devices for phones already sold after finding problems with the battery cell used.

SEOUL, SOUTH KOREA (SEPTEMBER 2, 2016) (REUTERS) – Tech giant Samsung Electronics said on Friday (September 2) it will replace all Galaxy Note 7 phones produced with a faulty battery and halt sales in the affected markets indefinitely, dealing a major blow to the company’s mobile earnings prospects.

Koh Dong-jin, head of Samsung’s mobile business, said during a news conference the recall will affect 10 countries but not China, where the firm started selling the phone with a different battery.

“By putting our top priority on customer safety, we’ve decided to halt sales of Galaxy Note 7 and offer new replacement handsets to all customers no matter when they bought it,” said Koh.

The executive did not comment on the exact number of phones that need to be replaced, though he said the firm has sold 2.5 million of the premium devices so far. The company plans to replace not only phones with faulty batteries that have actually been sold to consumers but also inventory or products in transit to retailers.

“I once again deeply apologise for the inconvenience to customers who like our products,” Koh added.

Samsung said on Wednesday (August 31) it had stopped supplying the top three local carriers with the phone, priced at 988,900 won ($886) in South Korea, and was delaying shipments as it conducts additional quality tests. The delay came after reports from some customers that their Note 7 caught fire while charging.

Samsung said new sales of the phones in the affected markets would begin after it deals with the replacement needs, which the firm estimates would take about two weeks. The company would extend refund periods for affected customers and offer exchanges for other Samsung phones, Koh said.

The mobile division accounted for about 54 percent of Samsung Electronics’ January-June operating profit of 14.8 trillion won.