Samsung Electronics Co. has finally discontinued their cursed Galaxy Note 7 smartphone, after botched recall doesn’t help to save their brand and heartache to consumers.
Following a string of reported incidents of replacements of the smartphone overheated and some even caught fire, they would permanently ceased the production and sales of the device.
“Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7,” the company’s spokesperson said.
Samsung shares have suffered the heaviest loss in a single day, losing 8% of the share value after the news was announced on Tuesday. Consumers are advised to switch off their original or replaced Note 7 immediately to prevent any mishap.
The worsening crisis also put investors away as they fear it could affect the company reputation with selling triggered by consumers that wiped off about $17 billion from company’s market value.
Before this, Samsung Electronics also told telecom carriers and retailers to halt their sales and exchanges of the handset pending the investigation into latest incidents. Moves have been made by major carriers in U.S on their own prior to the development.
Stock analysts had begun tallying up the likely financial hit for the company, as the recall went from bad to worse on both shipments and sales.
The potential loss for the last three months of the year could wipe out the entire mobile division’s operating profits for the fourth quarter, according to an analyst based in Seoul.
An equity analyst for Sanford C.Bernstein & Co in Hong Kong argued that Samsung should even consider ditching the Galaxy Note series altogether, as the sales of their flagship model, Galaxy S outsells Galaxy Note at a rate of roughly three to one. He also said Samsung needs to act swiftly and move on to protect their brand image. Samsung has put the blame on one bad battery supplier that since has been cut out of its production process.
The phone debacle will open door to other mobile phone manufacturers to dethrone the company in various markets. In China, Samsung already dropped out of the top five smartphone vendors by units shipped before the incident will slip farther behind. Currently, rivals like Apple, Huawei, Oppo, Viva and Xiaomi are all before Samsung in term of market share in the mainland China. Samsung’s slow recall also added fuel to the fire to the matter as they claimed the reported explosions in that market were faked. However, the Chinese regulators had identified at least 20 cases of overheating or explosions involving the Galaxy Note 7 and urged users to switch their devices off.
There were a few hours of silence after Chinese regulators announced the recall, new development wasn’t mentioned in the Samsung’s Chinese website. However, the company removed the previous statements, which had cast suspicion on Chinese phone explosion reports.
A late statement was then released by Samsung in the afternoon, calling for users of the embattled phone to turn in their devices. They also offered a half-heartened apology to public for any inconvenience caused prior to the incident.
A lesson of trying to rush everything before the deadline! NOW, THEY ARE PLAIN DEAD! Rest in peace, Galaxy Note 7!