Like a prank birthday candle you can’t blow out, Samsung’s troubles with its Galaxy Note 7 just won’t go away.
Both the Federal Aviation Administration and the U.S. Consumer Product Safety Commission are investigating reports that a Samsung Note 7 caught fire aboard a Southwest Airlines flight preparing for departure from Louisville, Kentucky, this week. The plane was evacuated and no one was injured.
The owner of the device said it was one of the replacement phones that the Korean electronics vendor has scrambled to produce following the nationwide recall of the first 2.5 million Note 7 models it sold. Analysts have estimated the company could lose $5 billion in revenue after accounting for the cost of recalling all those units.
Bloomberg reported this week that Samsung could face a second recall of the Note 7 if the one that caught fire on the place truly is a replacement device. Second recalls are rare, a former acting chairwoman of the safety commission told Bloomberg, but could be necessary if the latest incident “is something beyond an aberration.”
Samsung has said it, too, is looking to determine whether the latest incident involved a replacement device. But Sprint isn’t waiting: The nation’s fourth-largest operator said this week it will let Note 7 owners trade in their replacement devices for any other phone, according to Recode.
The Southwest Airlines incident occurred just as Samsung appeared to be regaining its footing following the worldwide Note 7 recall. The company said last week that more than 60 percent of the recalled devices sold in the U.S. and South Korea had been exchanged through the replacement program. And roughly 90 percent of Galaxy Note 7 users had chosen a replacement model “since products became widely available.”
A second worldwide recall would be horrible news for the world’s largest smartphone vendor entering the all-important holiday shopping season. Apple continues to see strong demand for the iPhone 7 thanks in part to carrier promotions that one analyst described as “unprecedented.” And Google is expected to heavily market the Pixel, its new phone aimed squarely at the high end of the market.
Samsung maintains a deep handset lineup, of course, and sales of the Galaxy S7 are apparently still strong. But the Note 7 debacle has already been very costly to Samsung, and things may be about to get worse.
- read this Bloomberg report
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