Daily Management Review

Yonhap Reports Note 7 Production Halt Deepening Samsung Recall Crisis


10/10/2016




Yonhap Reports Note 7 Production Halt Deepening Samsung Recall Crisis
Dealing a further setback for Samsung Electronics Co Ltd in the midst of its worst ever phone recall crisis, the tech giant has suspended production of its Galaxy Note 7 smartphones following reports of fires in replacement devices, South Korean media reported on Monday.
 
Yonhap News Agency cited an unnamed source at a Samsung partner firm as saying that as two U.S. carriers have stopped exchanging or selling new Note 7 phones, Samsung's decision to temporarily halt Note 7 production was done in cooperation with authorities in China and the United States.
 
Samsung did not immediately comment on the Yonhap report.
 
A new and potentially costly chapter to a global scandal which has hurt the reputation of the world's biggest smartphone maker could be created due to the problems with replacements for the Note 7 model. It also could add new dangers for consumers.
 
Due to reports of fires from replacement devices that Samsung has said used safe batteries, AT&T Inc, the No.2 U.S. wireless carrier, said it will stop issuing new Note 7s to replace recalled phones. Exchanging a recalled Note 7 device with another Samsung smartphone or other smartphone of their choice will be allowed by it.
 
While Samsung investigated "multiple reports of issues" with its flagship device, it was temporarily halting sales of new Note 7s as well as exchanges, no.3 wireless carrier T-Mobile US Inc said. A $25 credit on their phone bill was offered by T-Mobile for customers who brought in their Note 7s.
 
Supply of new Samsung Note 7s has been paused by Australia's largest carrier, Telstra Corp. "Samsung says it is confident in the replacement Note 7 and advises it has no reason to believe it’s unsafe," Telstra said in a statement on its website on Monday.
 
But passengers have been urged to stop using the phone on board by major airlines and airport authorities.
 
"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. The powering up and charging of Note 7s is prohibited on all its flights, Singapore Airlines also said on Monday.
 
Due to faulty batteries causing some of the phones to catch fire, Samsung announced a global recall of 2.5 million Note 7s in 10 markets including the United States on Sept. 2.
 
After a replacement model Note 7 smartphone began smoking inside the plane, a Southwest Airline flight was evacuated last week.
 
Samsung said it would share its findings when the investigation was complete after investigating the reports of "heat damage issues".
 
"If we determine a product safety issue exists, Samsung will take immediate steps approved by the CPSC (U.S. Consumer Product Safety Commission) to resolve the situation," Samsung told Reuters in a statement.
 
The warning about not using or charging the recalled Note 7 devices inside airplanes was reiterated by a South Korean government agency and it added that it was monitoring reports of the fires.
 
"I thought the Note 7 matter was coming to an end, but it’s becoming an issue again," Alpha Asset Management fund manager CJ Heo said.
 
(Source:www.reuters.com) 






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