As a result of a scandal involving a potential risk of fire Note7 Galaxy, Samsung announced the definitive halt of production and sales of its flagship phablet. On the world’s biggest smartphone manufacturer formally notified regulators in South Korea.
Galaxy Note7, shown in August, has collected very positive reviews in the press. The launch of the phablet, which was considered the main competitor to the iPhone 7, was overshadowed by incidents involving a faulty battery — it could catch fire and explode while charging.
Samsung has tried to rectify the situation: the company has recalled all 2.5 million of the already implemented devices and changed them with new ones. However, a few days ago it became known that the fire affected even the model of the “fixed” party. As a result the Korean firm asked partners around the world to stop sale and replacement Note7, and device owners can turn off and stop using them.
Analysts admit that the company may permanently abandon the Galaxy Note brand, which the scandal has caused irreparable damage. “Samsung need to act quickly and move forward to protect its brand image,” said Sanford C. Bernstein analyst mark Newman. According to him, the supposedly “fixed” batch of devices “raises serious questions” about the initial explanation of the defect.
According to the Daniel Kim, analyst at Macquarie Seoul, for the remaining three months of the year loss Samsung can reach 3.1 trillion won ($2.8 billion), which eliminates the profit in just mobile division of the company for the IV quarter. Shares of the manufacturer, writes The Wall Street Journal, is already heavily reduced in price. In today’s trading Samsung securities fell by 8%, resulting in its market capitalization declined by $17 billion. The fall was the strongest in one day since 2008.
Source: The Wall Street Journal