Tech giant Samsung Electronics said on Friday it will halt the sales of its Galaxy Note 7 smartphones in 10 markets , including Ireland, and will prepare replacements for phones already sold after finding problems with the battery cell. The phone was due to go on sale in Ireland, and across Europe, today, and was set to sell from €149 in Ireland.
In a statement, Samsung said the problems have been reported in 35 phones globally, and that the company is conducting a thorough inspection with its suppliers to identify possible affected batteries in the market.
“However, because our customers’ safety is an absolute priority at Samsung, we have stopped sales of the Galaxy Note 7,” the company said.
Samsung said it will voluntarily replace Galaxy Note 7s that Irish customers already have, over the coming weeks. For more information customers can contact 01-6950367.
The scale of the recall is unprecedented for Samsung, which prides itself on its manufacturing prowess. While recalls in the smartphone industry do happen, including for rival Apple, the nature of the problem for the Galaxy Note 7 is a serious blow to Samsung’s reputation, analysts said.
Analysts said the firm must act quickly to minimise damage to its smartphone recovery, after a string of product successes had reversed a fall in market share at the world’s biggest smartphone seller. The firm has said it aimed for the Note 7 to maintain strong sales momentum in the second half of the year against stiffening competition from the likes of Apple, which is expected to release its latest iPhone next week.
“I am concerned more about a potential reduction in sales than recall costs,” said analyst Jay Yoo at Korea Investment and Securities. “The recall is likely to be a blow to earnings.”
Samsung said new sales of the Note 7 in affected markets would resume after it deals with replacements, a process it expects will begin in about two weeks.
Investors sold Samsung shares after the delay announcement on Thursday, stripping about $7 billion from the firm’s market value. Sentiment recovered somewhat in Friday trade as the shares rose 0.6 per cent compared with 0.3 per cent in the broader market. Credit Suisse said a recall or major shipment delays could wipe 1.5 trillion won (€1.19bn) from Samsung’s 2016 operating profit estimate of 30.2 trillion won in an “absolute worst case” scenario. But the brokerage said that was unlikely, as it expected Samsung to resolve problem before the fourth quarter of the year.
– Additional reporting Reuters