Samsung to replace or refund one million
U.S. Galaxy Note 7 phones
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[September 16, 2016]
By Ankur Banerjee
(Reuters) - Samsung Electronics Co Ltd
<005930.KS> formally recalled 1 million Galaxy Note 7 smartphones sold
in the United States, replacing or refunding the flagship phones, whose
susceptibility to catching fire has damaged the image of the Korean
powerhouse.
Samsung received 92 reports of batteries overheating in the United
States, including 26 reports of burns and 55 cases of property damage,
the company said as it announced the recall in cooperation with the U.S.
Consumer Product Safety Commission (CPSC).
The recall is a costly setback for Samsung, which was counting on Galaxy
Note 7 to bolster sales as rivals such as Apple Inc <AAPL.O> launch new
devices. The scale of the recall is unprecedented for Samsung, the
world's largest smartphone maker.
Samsung said on Thursday that new Note 7 replacement devices will be
available at most retail locations in the United States no later than
Sept. 21.
Earlier this month, Samsung said it would recall all Note 7 smartphones
equipped with batteries it found to be fire-prone and halted their sales
in 10 markets, denting a revival of the firm's mobile business.
While recalls in the smartphone industry do happen, including for rival
Apple Inc <AAPL.O>, the nature of the problem for the Note 7 is a
serious blow to Samsung's reputation, analysts have said.
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A Samsung Electronics' Galaxy Note 7 new smartphone is displayed at
its store in Seoul, South Korea, September 2, 2016. REUTERS/Kim
Hong-Ji/File Photo
The CPSC said on Thursday that consumers should immediately power down
and stop using the recalled Galaxy Note 7 devices.
The U.S. Federal Aviation Administration has asked airline
passengers to switch off and unplug the recalled Note 7s during
flights.
Some 2.5 million of the premium devices worldwide need to be
recalled, Samsung said. Some analysts say the recall could cost
Samsung nearly $5 billion in lost revenue this year.
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