South Korea’s Samsung has told all Galaxy Note7 owners to turn off their phones, even if it is one of the replacement pieces.
Less than a month after the recall and exchange program was first announced, the company is permanently ending all production, sales and replacement of the phone. In what appears to be a never-ending PR nightmare for the firm, it has been found that replacement phones are prone to exploding as well. A man in Kentucky woke up to a room full of smoke emitted from a replacement phone two days ago and recently a Southwest plane had to be evacuated when a replacement phone caught fire.
American carriers AT&T, Sprint, Verizon and T-Mobile had already suspended sales before yesterday’s press release in which the company said it would be halting production.
We now know this won’t be a temporary halt. According to the Associated Press, Samsung revealed its decision to permanently end production in a regulatory filing today. Earlier in the day, South Korean newspaper Hankyoreh reported that unnamed sources said the company will stop Note7 sales completely.(See also, China Accuses Samsung Of “Arrogance” For Note 7 Recall)
“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,” said the company in a statement on October 10.
While things looked bad for Samsung when the defect in the batteries first became known, the company’s immediate acknowledgement of the problem and efforts to recall the devices were looked at favorably. It appears now that this isn’t a situation that can be salvaged.
Galaxy Note7 owners now have the option of exchanging the phone for a Galaxy 7 or Galaxy 7 Edge and gaining a refund of the price difference, or returning the phone and asking for a full refund.
Samsung stock fell 7.5% in trading today, wiping out $17 billion in market value. Apple stock has risen 2% in pre-market trading.
Verizon CEO Lowell McAdam, who told CNBC yesterday that he has never seen a recall like this in his tenure, also mentioned that Android users have been loyal to the operating system during this period. According to him, Apple (AAPL) is seeing a small boost in sales thanks to the scandal, but Samsung alternatives and Google (GOOG) Pixel phones are selling well. (See also, Apple and Samsung Head to the Supreme Court Today)