The Galaxy Note 7 saga is over. Samsung said in a filing with South Korean regulators Tuesday that it would permanently discontinue the production and sales of its flagship phablet that was launched just a couple of months ago. The botched recall of Galaxy Note 7 has damaged Samsung’s reputation and brought a headache to consumers who had purchased the device.
Samsung asks customers to turn off their Galaxy Note 7
The announcement came just a day after the Korean electronics giant said it would “temporarily” halt production of Note 7. Samsung has also asked users to immediately turn off their Note 7 and stop using the device. Last month, the company announced the recall of about 2.5 million Note 7 units after hundreds of reports of the phone catching fire or exploding.
Most people thought the worst was over as Samsung had issued replacement Galaxy Note 7 that were not vulnerable to overheating and explosion. But the company soon found itself in deeper trouble when the replacement devices started catching fire. Samsung said Tuesday that consumer safety was its “highest priority”, so the company had decided to permanently discontinue the product.
Joel Greenblatt Owned Hedge Fund On Why Value Investing Isn’t Working Now
Acacia Capital was up 12.27% for the second quarter, although it remains in the red for the year because of how difficult the first quarter was. The fund is down 14.25% for the first half of the year. Q2 2020 hedge fund letters, conferences and more Top five holdings Acacia's top five holdings accounted for Read More
Samsung stock tumbles 8%
Samsung said it had asked the wireless carriers and retail partners to stop sales and exchange of Galaxy Note 7. People who own an original or replacement Note 7 can get a refund at their place of purchase. The US Consumer Product Safety Commission (CPSC) hailed Samsung’s decision, saying, “It is the right move for Samsung to suspend the sale and exchange of all Galaxy Note 7s.”
Samsung’s shares plunged 8% on Tuesday, the biggest one-day decline in almost eight years. Macquarie analyst Daniel Kim estimates that the Galaxy Note 7 fiasco could cost Samsung up to $2.8 billion during the fourth quarter. Research firm Sanford C. Bernstein suggested that Samsung should ditch the Galaxy Note line altogether. The priority for Samsung at this point is to protect its brand image.
China launches Galaxy Note 7 recall
Samsung had not recalled the Galaxy Note 7 units sold in China. The company claimed that the devices intended for the Chinese market came with safe batteries. But there have been more than 20 confirmed cases of Note 7s catching fire or exploding in China. Chinese regulators have announced a recall of the Galaxy Note 7, overturning the Korean company’s initial stance.
South Korean finance minister Yoo Il-ho told media after a policy meeting that the government was closing monitoring the Galaxy Note 7 situation. The permanent discontinuation of the Note 7 could hurt South Korea’s export figures. Samsung’s mobile business accounts for about 2% of the country’s exports. The company should focus on rebuilding its brand and salvaging customer loyalty.