Samsung ceases Galaxy Note 7 production, report suggests

Samsung’s smartphone recall crisis has deepened after South Korean media said the tech giant had suspended production of its troubled Galaxy Note 7 model amid reports that replacement devices had also caught fire.

Citing an unnamed source at a Samsung supplier, the news agency Yonhap said the company on Monday decided to halt production of the smartphone, one of the most advanced and expensive products of its kind on the market.

The unprecedented halt in production is another blow to Samsung, which last month announced the global recall of at least 2.5m Galaxy Note 7 smartphones due to faulty batteries that caused some of the phones to emit smoke or catch fire.

Social media images of photographs of charred Note 7 phones have only added to the humiliation felt by Samsung, an iconic South Korean firm that has built a reputation for innovation and quality since entering the consumer electronics market in the late 1960s.

Two US mobile carriers have said they will stop issuing new Galaxy Note 7 smartphones after recent reports of replacement devices emitting smoke or bursting into flames.

In one incident, passengers were evacuated from a Southwest Airlines flight in Kentucky earlier this week after a replacement Note 7 started smoldering and making “popping noises” soon after its owner boarded the plane.

Samsung has yet to comment on the Yonhap report.

The latest problem with the Note 7 will frustrate Samsung’s attempts to repair its battered reputation and result in severe financial penalties, with some analysts predicting that the worst recall crisis in the firm’s history could cost it US$5bn in revenues.

Despite the recall, Samsung said last week that its third-quarter profit rose 6% to about $7bn on total sales of $43.9bn, thanks to income from Samsung’s other products.

The company sold 76m smartphones in the second quarter of 2016, most of them lower-priced models.