Samsung suspends Note 7 sales and exchanges after fires

Update (11/10/16): Samsung has now released another statement, which asks all carrier and retail partners to halt sales and exchanges of the Note 7. They recommend all users to power down and stop using both the old and new Note 7 units.

We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.

 

We remain committed to working diligently with appropriate regulatory authorities to take all necessary steps to resolve the situation. Consumers with either an original Galaxy Note7 or replacement Galaxy Note7 device should power down and stop using the device and take advantage of the remedies available.

Original Article (10/10/16):

Earlier today, Samsung released a statement that it is adjusting shipment volumes for its Galaxy Note 7 phablet based on the recent instances of the device catching fire. These incidents continued even after the company had issued a recall of the 2.5 million sets produced, with at least four known cases so far — one on a flight, one in Taiwanone in a 13 year-old’s hand in Minnesota, and a fourth in a man’s bedroom in Kentucky.

According to the South Korean firm, the reason for doing so was to increase the depth of their inspections, and carry out more stringent quality control checks. There was no further comment.

This action was taken after consulting authorities in the United States and in China, after two American telcos (AT&T and T-Mobile) stopped selling new Note 7s, and exchanging ‘defective’ ones for the ‘replacement’ units. The fact that the issues plaguing the Note 7 have continued despite sending out replacement sets is a matter of concern for the future of the Note series, and could have significant impact on consumer confidence in the company itself.

AT&T is United States’ 2nd largest telco, while T-Mobile is the 3rd largest, and their decision to halt sales is a further hammer blow to Samsung. The latter is even providing US$25 in credit for Note 7 owners, and also allowed them to exchange the device for any other smartphone of their choosing.

Already, Samsung shares were down 3.3 percent as of 0925 SGT (GMT +8), compared with a 0.1 percent fall for the broader market.

“If we determine a product safety issue exists, Samsung will take immediate steps approved by the CPSC (U.S. Consumer Product Safety Commission) to resolve the situation,” Samsung told Reuters in a statement.

This news would have done no favour for potential customers who were willing to give Samsung a second chance with the device. Already, there are many customers who are attempting to return older Samsung Note devices, or even the unrelated Galaxy S series devices in fear of their devices following after the Note 7.

While Samsung’s dominion over the market will ensure that any long-lasting negative effects from this fiasco will be minor at best, Q4 sales of the device will be severely damaged. Questions are also being raised about the yet-to-be-released Galaxy S8, for a misstep on such a large scale hints at issues larger than just with one device. The Galaxy S8 is set to launch around March 2017.

Quality control checks are being highlighted as the main culprit, with Samsung making no public statement since the recall, indicating that their engineers are as of yet still unable to solve the issue.

With regards to Singapore, all three telcos (M1, Singtel, and Starhub) have also halted sales of the beleaguered device, with no mention of it in their online stores or updated promotional materials. Third party retailers like Mobyshop have also pulled the Note 7 from their storefronts.

It is now a waiting game to see if Samsung is able to find a solution of the Note 7 in time, before rival smartphones like the recently launched Google Pixel or iPhone 7 begin drawing away many loyal Samsung customers.

Source - CNBC.

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