Just a week after Samsung made the recall of the Galaxy Note 7 official, a very alarming incident has taken place that could change the mind of naysayers claiming their handsets are unlikely to catch fire or explode.
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Samsung Electronics’ common shares were down 6.3 percent to 1,476,000 won each after touching their lowest level since July 12, and were on track for their biggest daily percentage drop in more than four years.
Samsung Galaxy Note 7 owners in the USA will be able to exchange their phones for a number of models, in addition to receiving a $25 gift card. Investors are concerned that the recall costs will weigh heavily on the company’s bottom line.
“The whole situation over Samsung is becoming more serious and complicated as more state authorities around the world are advising nationals to stop using the Note 7”, he told the news agency AFP. The strong verbal warning from US authorities came after Samsung Electronics willingly stopped selling the product after preliminary finding on battery defect in lithium-ion pack in some devices and offered to replace or refund the entire 2.5 million devices already sold over the last month. Coincidentally, U.S. smartphone rival Apple Inc.is readying the September 7 launch of iPhone 7.
The mobile business accounts for a major share of profits for Samsung, which also produces home appliances and memory chips.
The announcement is part of a global recall affecting up to ten countries.
He advised consumers to use replacement phones which would be loaned by the firm until a new Note 7 equipped with fault-free batteries are provided.
“This measure is to avoid the possibility of these devices’ batteries causing fires”, it said.
Growing concern over the device prompted air carriers and aviation authorities in countries including the US, Australia, Canada, Japan, Singapore, Indonesia and India to ban the use of the Note 7 durig flights.
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Samsung SDI’s faulty batteries fitted on the Note 7 has been pinpointed as the main culprit of the battery issue.
