Samsung Suffers Another Hit Over Galaxy Note 7
Samsung Electronics has suffered another hit over its recalled Galaxy Note 7 as smartphone major distributors stop offering replacements due to safety concerns.
The mobile company acknowledged it was ”adjusting production” of the device following this development.
The South Korean electronics giant has struggled in the wake of its September 2 decision to issue a global recall for 2.5 million Note 7s because of complaints that the lithium-ion battery exploded while charging.
And over the past week, reports emerged of replacement units also catching fire. This prompted US telecommunications firm AT&T and German rival T-Mobile to announce Sunday a halt to recall exchanges pending further investigations.
Their announcement prompted a steep dive in Samsung’s share price, which fell more than four percent at one point in morning trade. It recovered later to close the day at 1.68 million won ($1,515)– down 1.52 percent.
The market was also reacting to a South Korean media report that Samsung had temporarily shut down Note 7 production lines after discussions with consumer safety regulators from South Korea, the United States and China.
“We are in the process of adjusting production volumes,” Samsung said in a written response to the report.
The company said the move was “to enhance quality control and to enable thorough investigations following the recent cases of Galaxy Note 7 explosions.”
Despite all its problems, Samsung on Friday issued a stronger-than-expected operating profit forecast for the third quarter, thanks largely to strong sales of memory chips and OLED display panels.
