South Korea – The Samsung Galaxy Note 7 will be permanently discontinued, as stated by Samsung Electronics on Tuesday. The decision was made a day after the company stopped global sales.
Samsung admitted the phone had a “manufacturing defect” in the batteries, and decided to recall the devices for “the sake of consumer safety.” However, many customers feel the company did not handle the issue correctly, which lead to a loss of consumer trust.
The Galaxy Note 7 was launched in August, and soon, hundreds of customers reported their phones caught fire after the batteries were overheated. Samsung recalled almost three million units and replaced them, but soon they were also igniting.
Last weekend, America’s top carriers halted the device sales. On Monday, the South Korean company claimed it was “temporarily adjusting” the phone’s production, and on Tuesday they issued a new statement confirming the device’s permanent discontinuity.
“Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7,” stated the company in a press release.
Issues in the United States
The number of dangerous units was a “small minority,” however; the risk was too high for the company. In early October, Michael Klering, a Kentucky resident, had to be hospitalized with smoke-induced acute bronchitis after his Note 7, a replacement unit, ignited and filled his room with smoke. Klering is deciding whether he should pursue legal action against the company.
In a previous incident, a passenger’s replacement phone began casting smoke in a Southwest Airlines flight in Louisville, which led to the plane being evacuated.
An ongoing investigation in both South Korea and the United States is trying to figure out why the replacement units still malfunctioned. So far, it is believed that these replacement devices feature a different defect, as stated by an official at the South Korean safety agency.
The company’s shares plunged 8 percent in Seoul by Tuesday morning. This is Samsung’s biggest fall since the financial crisis of 2008. In China, the company also stated it would provide either a full refund or a replacement unit of another model.
Samsung is especially criticized in the Asian giant, since the company said back in September that the Note 7 phones had batteries from a different supplier, and as such, would not be affected by the malfunction, however, this was not the case.
Samsung vs. Apple
The company is also battling in the Supreme Court with its primary competition, Apple. The latter had filed a lawsuit against Samsung back in 2011, declaring patent infringement. Apple won the case in 2012, and it was decided that Samsung would have to pay four hundred million dollars.
However, the South Korean company appealed the court decision, and the fight is now occurring on the Supreme Court. Nonetheless, the payment to Apple will be less than what Samsung will lose after recalling the Galaxy Note 7, which is estimated in a seventeen billion dollars loss.
It is believed that Apple will find a way to capitalize on Samsung’s damaged reputation, taking into account the new iPhone 7 will be launched in December.
Source: The Charlotte Observer