Samsung Prematurely Ends Production of the Galaxy Note 7

Amidst reports of Galaxy Note 7 phones unexpectedly combusting or exploding, Samsung has announced that it will permanently end its production of the combustible phones. This news comes a day after the company had escalated its recall efforts by asking retailers and telephone carriers to stop selling or even offering exchanges for the phone. The Galaxy Note 7 phone has only been available for a few weeks, but there are already numerous reports of customers who have sustained injuries as a result of the defective product.

 

One Honolulu Galaxy Note 7 owner reported that her phone began smoking only moments after she had visited Samsung’s website. A video of the incident shows the spectacular end of her phone as it becomes permanently unusable in a billowing puff of smoke.

 

Samsung had already been offering to replace overheating Galaxy Note 7 phones with new ones, but it soon became apparent that the entire Galaxy Note 7 line was defective. Initially the defect was believed to only affect about 2.5 million phones. At the time, a Samsung spokesperson admitted that there were “a limited number of reports,” but were quick to “reassure customers that [they’re] taking every report seriously.”

 

At least one notable report was serious enough to spur other companies into action. Over the weekend, several U.S. telephone carriers announced that they would stop replacing overheating Galaxy Note 7 phones with new ones, after a reported “replacement” Galaxy Note 7 phone spontaneously ignited on a Southwest Airlines flight. The next day, government investigators from the Consumer Product Safety Commission (CPSC) cited “exigent circumstances” when it used a subpoena to confiscated the charred remains.

 

Since Friday, the company’s stock has been in free fall, losing over 10% of its market value. This amounts to a substantial loss of billions of dollars to Samsung’s market value, ending its steady growth since the beginning of the year. The impact this debacle has had on their reputation may be harder to quantify.

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