South Korean tech giant Samsung has announced an unprecedented global recall for its flagship phablet Galaxy Note7, after several handsets caught fire during charging owing to a battery fault.
In a public apology yesterday, Samsung promised to replace 2.5 million units of the 5.7-inch premium smartphone sold so far, both in South Korea and overseas. The company said it had received 35 reports of battery issues worldwide, and initial investigations revealed a battery fault that affects 24 in one million handsets.
"Investigations are still ongoing, but we have decided to stop selling the phone and offer replacements as customer safety is our top priority," said Mr Koh Dong Jin, president of Samsung's mobile communications business.
Analysts said the recall could hurt Samsung's bottom line and its competitive edge against rivals Xiaomi and Apple, which is set to release its latest iPhone next week.
The Note7 was launched on Aug 19 in 10 countries, drawing rave reviews. Industry experts had predicted it could sell as many as 15 million units this year. Samsung suspended sales of the phablet in South Korea early this week, after news reports emerged that several handsets had caught fire during charging.
CUSTOMER SAFETY COMES FIRST
Investigations are still ongoing, but we have decided to stop selling the phone and offer replacements as customer safety is our top priority.
MR KOH DONG JIN, president of Samsung's mobile communications business.
Analyst Bryan Ma from market intelligence firm IDC said consumers would now think twice about buying the Note7. "Obviously the thought of an exploding battery isn't something to be taken lightly... that's quite a shame given how much excitement Samsung has been garnering around the phone in the past few weeks," he said.
Mr Clement Teo, principal analyst at market research firm Ovum, said the Samsung brand may not be adversely affected as this marks its first recall, but it will have to bear the costs of compensation.
Samsung share prices in South Korea were not affected yesterday as the well-timed recall was issued two hours after the market closed.
Samsung said it will work with telco partners worldwide to replace the Note7 "as soon as possible". It will take two weeks to prepare a new batch of products, said Mr Koh.
In Singapore, telcos Singtel, M1 and StarHub announced they were no longer selling the smartphone. IT retailer Challenger has also pulled the phone from its shelves.
Some Note7 owners have voiced concern about using the smartphone in the interim period, while others asked if they could get a different model instead.