Samsung’s mobile business has suffered a blow after reports of exploding batteries forced the firm to delay shipments of Galaxy Note 7 smartphones, and knocked $7b (€6.25bn) off its market value.
The stock price nose-dived after the global smartphone leader reported the shipments had been delayed for quality control testing, and that shipments to South Korea’s top three mobile carriers had been halted.
Faults with the new premium flagship device could deal a major blow to the South Korean giant, which was counting on the Galaxy Note 7 to maintain its strong mobile earnings momentum against Apple’s new iPhones expected to be unveiled next week.
“This is some major buzz-kill for Samsung, especially given all of the hard-earned excitement that products like the Note 7 have been garnering lately,” said IDC analyst Bryan Ma. “The pending Apple launch puts all the more pressure for them to contain this quickly. The timing of this couldn’t have been worse.”
Samsung did not comment on what problem it was trying to address or whether other markets were affected besides South Korea.
Sister company Samsung SDI said that while it was a supplier of Galaxy Note 7 batteries, it had received no information to suggest the batteries were faulty.
Several people posted images and videos of charred Galaxy Note 7s online and said the phones caught fire.
“Be careful out there, everyone rocking the new Note 7, might catch fire y’all,” one user said in a YouTube clip showing a burnt Note phone. It was not immediately possible to confirm the veracity of the clip.
Several South Korean media reports, without citing direct sources, said Samsung will soon announce a plan to recall affected Note 7 phones and replace their batteries as opposed to giving the users a new device. A Samsung spokesman declined to comment.
Last year, production problems for the curved displays for the Galaxy S6 edge resulted in poor sales.
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