Samsung halted sales and issued a worldwide recall for its Galaxy Note 7, acknowledging “a battery cell issue” with the new high-end phone that has resulted in nearly three dozen unspecified problems globally.
The South Korean electronics vendor didn’t disclose details regarding those problems, but the company saw its market capital plummet nearly $7 billion earlier this week due to increasing reports of exploding batteries.
“In response to recently reported cases of the new Galaxy Note 7, we conducted a thorough investigation and found a battery cell issue,” the world’s largest smartphone vendor said in a prepared statement. “To date (as of September 1) there have been 35 cases that have been reported globally and we are currently conducting a thorough inspection with our suppliers to identify possible affected batteries in the market. However, because our customers’ safety is an absolute priority at Samsung, we have stopped sales of the Galaxy Note 7.”
The company also said it will voluntarily replace Galaxy Note 7 devices that have already been sold “over the coming weeks.” And T-Mobile issued a brief statement saying it has suspended sales of the device through all of its channels.
The South Korean news agency Yonhap earlier this week reported five claims of the phone exploding or catching fire while being charged, and users took to social media sites to post photos and videos of burned phones.
Problems with combustible batteries mark a major misstep for the No. 1 smartphone manufacturer in the world at a critical time. The Galaxy Note 7 launched in the U.S. less than two weeks ago to rave reviews, and Samsung said demand had outpaced supply and forced the company to push back the launch in some markets.
The release of the Galaxy Note 7 follows the launch earlier this year of the Galaxy S7 Edge, which was the top-selling Android phone in the world during the first half of 2016. Indeed, Samsung made the three best-selling Android devices during the first six months of 2016: The S7 Edge shipped 13.3 million units, the Galaxy J2 shipped 13 million units, and 11.8 million Galaxy S7 handsets were shipped.
Samsung was well positioned to continue that momentum with its latest flagship phone, which sells for roughly $850 in the U.S. But the worldwide smartphone market has become extremely competitive as growth has slowed and penetration rates reach saturation in major markets such as North America, Europe and China.
Meanwhile, Apple – which remains the world’s second-largest smartphone vendor -- is holding a high-profile media event next week during which it is expected to introduce its newest high-end iPhone. Samsung will have to continue to move quickly to address problems with the Galaxy Note 7 to minimize any ground it may lose to its biggest rival.
- read Samsung’s announcement
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