SEOUL/NEW YORK • A United States government safety agency urged all consumers to stop using Samsung Galaxy Note7 phones, which are prone to catch fire, and top airlines globally banned their use during flights.
Following reports that the phones' batteries have combusted during charging and normal use, the US Consumer Product Safety Commission said on Friday it was working on an official recall of the devices and that users should turn them off in the meantime.
Samsung Electronics Co said it was working with the agency and asked customers to immediately turn in their Note7 phones. It voluntarily issued a recall last week for 10 markets, including South Korea and the US, and it said it was expediting shipments of replacement phones to customers in the US.
The US government action heralds more fallout for the South Korean manufacturer, which may take a financial hit from the recall and lose customers who are concerned about the quality of its flagship phones. Some analysts say the recall could cost Samsung nearly US$5 billion (S$6.8 billion) in revenue, after accounting for expenses from the recall process.
For Samsung, which prides itself on manufacturing prowess, the scale of the recall is expected to be unprecedented. Some 2.5 million of the premium devices have been sold worldwide, it has said.
Samsung said US users can exchange their phones and get a US$25 gift card.
In a separate statement yesterday, Samsung asked consumers in South Korea to discontinue the use of their Galaxy Note7 phones and visit one of the company's service centres for the recall process.
"The cost of the recall is going to be astronomical," said product liability expert Jahan Rasty, who is chief executive officer of Real- World Forensic Engineering.