Samsung Down, Galaxy Note7 Out

...

Shares of Samsung Electronics fell sharply on Tuesday after the company confirmed reports that it had halted production of its flagship Galaxy Note7 smartphone, just launched this summer.

The move came after several replacement phones reportedly smoldered or caught fire.

Samsung had been working with the U.S. Consumer Product Safety Commission on a voluntary recall and replacement program, spurred by reports that dozens of the new devices had burst into flames due to faulty lithium-ion batteries.

Regulators also had banned them from commercial aircraft.

The CPSC will continue its active investigation into the reports of phones "overheating and burning in multiple states," said Chairman Elliot Kaye, who praised Samsung, along with retailers and carriers, for suspending Note7 sales and replacements.

"No one should have to be concerned that their phone will endanger them, their family or their property," Kaye said. "Due to the ongoing safety concerns associated with Galaxy Note7 phones, it is the right move for Samsung to suspend the sale and exchange of all Galaxy Notes7s."

The Federal Aviation Administration has urged passengers not to use, charge or stow any of the Galaxy Note7 phones in checked baggage.

The FAA referred to last month's safety alert, which notes that dangerous or defective lithium-ion batteries cannot be transported via air cargo and carry heavy restrictions for passenger or crew transit.

One of the highest-profile incidents involving a Galaxy Note7 phone occurred last week, after a passenger who had boarded a Southwest Airlines plane scheduled to fly from Louisville to Baltimore reported smoke emitting from his Galaxy Note7 replacement device, according to Lori Crabtree, spokesperson for Southwest.

All passengers and crew safely exited the plane through the main cabin door, she told the E-Commerce Times.

The Samsung brand, which has enjoyed a longstanding reputation for quality, likely will take a beating, as the recall and subsequent halt of sales expose something seriously amiss in the production and quality control process at the company.

"This is a disaster that keeps on growing for Samsung and their brand," observed wireless analyst Jeff Kagan.

"This problem should never have occurred. The devices should have been tested thoroughly, and this problem should have been found before it hit the market," he told the E-Commerce Times.

While Samsung has other mobile phones and other devices in its product line, the damage has spilled over to some of those other devices as well, Kagan noted. Some consumers have lost trust in the overall brand.

"Other companies have been dethroned for less than this," he said.

There's a perception -- based on anecdotal evidence and analyst forecasts -- that Samsung has been losing market share to Apple, which happened to release its top-of-the-line iPhone 7 within weeks of the Galaxy Note7 release.

Samsung was the market leader for mobile phones worldwide during the first half of the year, with 22.8 percent of the market compared to Apple's 13.8 percent, according to market share data from Gartner analyst Tuong Nguyen.

In the U.S., Apple led in the first half with 36.8 percent market share, compared to Samsung's 26 percent.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

Categories
Guide
0 Comment

Leave a Reply

Captcha image


RELATED BY

  • 5300c769af79e

    Slacker Radio (for iPad)

    Slightly Tweaked DesignThe latest Slacker iPad build keeps most of the previous version's design elements, but features a few visual changes.The look, curiously, doesn't conform to Slacker's smartphone and desktop designs that feature a soft, baby blue color scheme and panel-driven interface.
  • 5300c769af79e

    Google Expands Android 'Early Access' Beta Program

    It can be difficult for app developers to get feedback on their creations, so Google this year launched an Early Access beta program that let Android users try out pre-release apps and submit their thoughts.The success of that early test run has now convinced Google to expand Early Access to even more developers.
  • 5300c769af79e

    FCC's Tom Wheeler Hitting the Road

    United States Federal Communications Commission Chairman Tom Wheeler on Thursday announced that he will leave the agency he helmed for the past three years on Jan.Prior to joining the FCC, Wheeler served as managing director for Core Capital Partners, a venture capital firm that helped fund companies that were developing Internet Protocol-based technology.
  • 5300c769af79e

    Friday App Sales: Dokuro, Backdrops Pro, Final Fantasy VI, and More

    This Friday brings us a whole new list of apps and games on sale via Google Play.To give you a preview, Square Enix’s Final Fantasy VI can be grabbed for $11, the Pro version of Backdrops (my favorite wallpaper app) is on sale for $1, and you can grab Metro 2033: Wars for $4.