Samsung Permanently Stops Producing Galaxy Note 7 Smartphone
In just over two months, Samsung's Galaxy Note 7 has gone from smartphone star to epic failure, with the South Korean firm confirming today that it is permanently halting production of the device. Linked to numerous battery-related fires, the Galaxy Note 7 could end up costing Samsung many billions of dollars.
Launched in early August, the Galaxy Note 7 appears to have had a flaw that caused the battery's positive and negative poles to come into contact, generating enough heat to start a fire in some cases. After temporarily stopping sales in the U.S. on Sept. 2, Samsung began an exchange program for consumers, but the replacement devices were quickly being blamed for fires as well.
One of the more dramatic incidents involved a reported replacement phone that caught fire on board a Southwest Airlines plane preparing to depart from Kentucky's Louisville International Airport on Oct. 5, although no injuries were reported. In another case over the weekend, a Kentucky man with a replacement Galaxy Note 7 was treated for smoke inhalation after he said he woke up to find his bedroom filled with smoke.
'The Right Move'
Yesterday, Samsung said it was "temporarily adjusting" its production schedule and would ask its carrier and retail partners to halt sales and exchanges of the Galaxy Note 7 while investigations into phone-related fires continued. However, the company issued a statement today saying it would put an end to production of the smartphone.
"Taking our customers' safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7," according to the statement.
Elliot Kaye, chairman of the U.S. Consumer Product Safety Commission, said that decision was "the right move." His agency has been investigating safety issues linked to the phone since early September, and worked with Samsung to issue a voluntary recall of the devices.
"No one should have to be concerned their phone will endanger them, their family or their property," Kaye said yesterday in a statement posted on the agency's Twitter account. "Due to the ongoing safety concerns associated with Galaxy Note 7 phones, it is the right move for Samsung to suspend the sale and exchange of all Galaxy Note 7s."
Overheating Linked to 'Error in Production'
According to a Sept. 13 report by Bloomberg, Samsung blamed the Galaxy Note 7's problems on "a minor battery manufacturing flaw." In a report filed with the Korean Agency for Technology and Standards, Samsung reportedly said its initial investigations linked the safety issues to "an error in production that placed pressure on plates contained within battery cells."
Lithium-ion batteries, used in smartphones and many other electronic devices, are an efficient and compact energy-storing technology. However, lithium's flammability has proven to be a significant drawback with such batteries, and bulk shipments of lithium-ion batteries are prohibited on some passenger airlines.
Samsung did not respond to our request today for an update on how it plans to deal with the fallout of the Galaxy Note 7 production halt. However, the company's shares saw heavy losses early today, ranging from $14 billion to $19 billion even before the permanent halt was announced. According to the Wall Street Journal, this morning's 8 perceent drop marked the company's "biggest one-day decline in eight years."