Samsung halts production of Note 7 phone

Samsung Electronics suspends production of the smartphone a month after recall over explosive batteries, reports say.

The announcement saw Samsung’s share price plunge by 4 percent [Reuters]

Samsung Electronics has temporarily suspended production of its Galaxy Note 7 smartphones following reports of fires in replacement devices, according to South Korean media.

Monday’s move is a further setback for the technology giant in the midst of its worst ever phone recall crisis.

“[Samsung] still hasn’t confirmed that it has definitely halted production of the Galaxy Note 7 but it has released a statement for the first time today, Monday, in the last hour or so, saying that it is ‘temporarily adjusting the Galaxy Note 7 schedule to take further steps to ensure quality and safety matters’,” Al Jazeera’s Harry Fawcett said, reporting from Seoul.

The Yonhap News Agency reported that Samsung’s decision to halt Note 7 production was done in cooperation with authorities in China and the United States, citing an unnamed source at a Samsung partner company.

“If the Note 7 is allowed to continue it could lead to the single greatest act of brand self-destruction in the history of modern technology,” Eric Schiffer, brand strategy expert and chairman of Reputation Management Consultants, told Reuters news agency.

“Samsung should arrest the sale of Note 7’s and protect the safety of their clients before profits and ultimately as a byproduct protect Samsung. Samsung needs to take a giant write-down and cast the Note 7 to the engineering hall of shame next to the Ford Pinto.”

On Sunday, US telecommunications firm AT&T and German rival T-Mobile said they would halt exchanges of recalled Samsung Galaxy Note 7s pending further investigations.

The announcement saw Samsung’s share price plunge by as much as 4 percent in early morning trade on Monday – even before the Yonhap report came out.

Shares fall

At midday, Samsung shares were trading at 1.65 million won – down 3.2 percent from Friday’s close.

AT&T said it would still offer customers the option to exchange Galaxy Note 7s for another Samsung smartphone or another device of their choice.

T-Mobile said it was halting sales of the smartphone, as well as the exchanges.

Australia’s largest carrier, Telstra Corp, said Samsung had paused supply of new Note 7s to the company.

“Analysts are saying [the recall] could cost between $2bn and $5bn, and that was even before this latest development,” said Fawcett, adding that some 2.5 million phones worldwide would need to be replaced.

Major airlines and airport authorities again urged passengers to stop using the phone on board.

“In light of recent incidents and concerns raised about Samsung Galaxy Note 7 devices, passengers are strongly advised not to turn on or charge these devices on board aircraft and not to stow them in any checked baggage,” Hong Kong International Airport said on its website on Monday.

Singapore Airlines also said on Monday that the powering up and charging of Note 7s is prohibited on all its flights.