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Samsung Electronics says to sell refurbished Galaxy Note 7s

[March 28, 2017] By Se Young Lee

SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd said late on Monday that it plans to sell refurbished versions of the Galaxy Note 7 smartphones, the model pulled from markets last year due to fire-prone batteries.

Samsung's Note 7s were permanently scrapped in October following a global recall, roughly two months from the launch of the near-$900 devices, after some phones self-combusted. A subsequent probe found manufacturing problems in batteries supplied by two different companies - Samsung SDI Co Ltd and Amperex Technology Ltd.

Analysis from Samsung and independent researchers found no other problems in the Note 7 devices except the batteries, raising speculation that Samsung will recoup some of its losses by selling refurbished Note 7s.

A person familiar with the matter told Reuters in January that it was considering the possibility of selling refurbished versions of the device or reusing some parts.

Samsung's announcement that revamped Note 7s will go back on sale, however, surprised some with the timing - just days before it launches its new S8 smartphone on Wednesday in the United States, its first new premium phone since the debacle last year.

Samsung, under huge pressure to turn its image around after the burning battery scandal, had previously not commented on its plans for recovered phones.

"Regarding the Galaxy Note 7 devices as refurbished phones or rental phones, applicability is dependent upon consultations with regulatory authorities and carriers as well as due consideration of local demand," Samsung said in a statement.

South Korea's Electronic Times newspaper, citing unnamed sources, said on Tuesday Samsung will start selling refurbished Note 7s in its home country in July or August and will aim to sell between 400,000 and 500,000 of the Note 7s using safe batteries.

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A customer tries out a Samsung Electronics' Galaxy Note 7. REUTERS/Kim Hong-Ji

Samsung said in a statement to Reuters the company has not set specifics on refurbished Note 7 sales plans, including what markets and when they would go on sale, though noting the phones will not be sold in India as some media reported earlier this year.

The firm said refurbished Note 7s will be equipped with new batteries that have gone through Samsung's new battery safety measures.

"The objective of introducing refurbished devices is solely to reduce and minimize any environmental impact," it said.

The company estimated it took a $5.5 billion profit hit over three quarters from the Note 7's troubles. It had sold more than 3 million Note 7s before taking the phones off the market.

The company also plans to recover and use or sell reusable components such as chips and camera modules and extract rare metals such as copper, gold, nickel and silver from Note 7 devices it opts not to sell as refurbished products.

The firm had been under pressure from environment rights group Greenpeace and others to come up with environmentally friendly ways to deal with the recovered Note 7s. Greenpeace said in a separate statement on Monday that it welcomed Samsung's decision and the firm should carry out its plans in a verifiable manner.

($1 = 1,109.0100 won)

(Reporting by Se Young Lee; editing by David Clarke/Ruth Pitchford and Himani Sarkar)

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