Tuesday, October 18, 2016

SAMSUNG Stands to Lose a Billion in Faulty GALAXY NOTE 7 Recall

The recall is on as Samsung begins damage control on the rather explosive first month of their latest stylus-equipped mobile phone, the Galaxy Note 7. Following a rash of incidents documented online concerning brand new Note 7s catching fire and melting while being charged, the Korean electronics company has ordered the Note 7 recalled from the market; but this is a move that is going to cost them.

According to the International Business Times, the Note 7s which caught fire during charging were equipped with faulty batteries from one of two suppliers under contract with Samsung. As it is extremely difficult to determine which batteries that have been packaged with the Note 7s already rolled out in the market originated from the supplier at fault, the company decided to stop sales of the phone in 10 countries, including South Korea and the US, and carry out a general recall of all their products in the market, to be executed in 2 weeks.

As for the 2.5 million Galaxy Note 7s already sold – including the 35 reported to have exploded in the middle of charging their batteries Samsung is magnanimously offering a free replacement of  their bought phones in exchange for a different model. In the end, the venture is estimated to cost Samsung losses amounting to $1 billion according to an article by BGR, a value that has not been confirmed by the company save a throwaway line by Samsung mobile phone business head Koh Dong Jin that it was most “heartbreaking”.

Samsung itself brought out a statement regarding the recall, apologizing to the customers for their inconvenience and the ensuing market upheaval. “This is to ensure that Samsung continues to deliver the highest quality products to our customers,” they said. “We are working closely with our partners to ensure the replacement experience is as convenient and efficient as possible.”

They also noted that Note 7s sold in China were mostly equipped with batteries from another supplier, so it has not been made clear if they will be included in the 10 countries for recall.

Regarding the product exchange for bought suspect Note 7s in the US, Samsung explained that these devices can be exchanged for either a Galaxy S7 or Galaxy S7 Edge as of September 5, accompanied by either a $25 gift card or bill credit. Any Note 7 accessories will also be refunded. All concerned new Not 7 owners need only to go to the nearest Samsung service center.

In the meantime stores such as Target and Amazon have announced their stoppage of Note 7 sales. The same goes for top American mobile carriers like AT&T and Verizon.

Meanwhile, Samsung rival Apple will be unveiling their latest iPhone, the 7 and 7 Plus, on Wednesday September 7.

Photo Credit to: International Business Times