Samsung has paused shipments of the Galaxy Note 7 smartphone, amid unconfirmed claims that the handset overheats. Samsung will be hoping to avoid a repeat of the problems with the Note 7, which has garnered favourable reviews and is expected to sell double that of previous versions.
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“Samsung will need to respond to this quickly in order to calm market jitters”, said Park Jung-hoon who is the fund manager at HDC Asset Management.
The Korean company said in a statement that: “Shipments of the Galaxy Note 7 are being delayed due to additional tests being conducted for product quality”.
“The timing could not be worse for Samsung”, said Roberta Cozza, research director at Gartner. Specific details are still scant, but Reuters, which helped break the story, claims “images and videos of charred Galaxy Note 7s” have shown up online. Samsung’s stock lost 2 percent in Seoul on Thursday.
Hyundai Securities said in a report released on Thursday that the Galaxy Note 7’s problems appeared to be related to modules or parts, and that such “malfunctions” should be resolved “within a matter of few weeks”.
Reports of exploding Note 7 devices have triggered the company to halt the shipments.
Samsung has not said how its decision will affect availability of the phone outside Korea, but it seems unlikely the glitch is a localised issue.
A demonstration of the Galaxy Note 7’s iris recognition functionality during its South Korea launch ceremony. Samsung has not commented yet on the cause of the Note 7 explosions.
Its mobile profit is on track to post annual growth for the first time in three years, thanks to robust sales of the Galaxy S7 and S7 edge devices that it launched in March to critical acclaim.
Samsung Electronics sister company Samsung SDI Co Ltd 006400.KS said that while it was one of the suppliers of Galaxy Note 7 batteries, it had received no information to suggest that its batteries were faulty.
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A user wrote: “There was another explosion of the Galaxy Note 7”.
