Samsung stops sales of all Galaxy Note 7 smartphones

Following widespread reports of exploding batteries tech giant Samsung has announced it is stopping all global sales of its new Galaxy Note 7 flagship device while it tries to get to the bottom of the issue.

“In response to recently reported cases of the new Galaxy Note 7, we conducted a thorough investigation and found a battery cell issue,” said a Samsung statement.

“To date (as of September 1) there have been 35 cases that have been reported globally and we are currently conducting a thorough inspection with our suppliers to identify possible affected batteries in the market. However, because our customers’ safety is an absolute priority at Samsung, we have stopped sales of the Galaxy Note 7.

“For customers who already have Galaxy Note7 devices, we will voluntarily replace their current device with a new one over the coming weeks.”

The Note range is one of Samsung’s best-selling mobile devices so this is a pretty major undertaking. Neil Shah of Counterpoint Research advised Telecoms.com that Samsung has already shipped around three million units into the channel, but noted that acting quickly will have helped minimise the impact. He also confirmed that the offending battery is made by Samsung SDI so there are likely to have been some heated (sorry) exchanges at Samsung towers.

“We estimate almost three million Galaxy Note 7 were shipped into the channel with slightly above 2 million odd sold,” said Shah. “Since the battery is non-removable the entire phone needs to be recalled to be replaced with a newly designed or produced battery.

“As this has happened quite early in the product launch cycle instead of post-holiday season, it won’t cause a huge dent for Samsung financially. However, Samsung has lost the only, and critical, window of opportunity it has between the slowdown in six-month old Galaxy S7 sales and the upcoming iPhone 7 launch to capitalize on Galaxy Note 3/4 or iPhone 5s/6 users waiting to upgrade. This will also make consumers think twice when they in future decide to buy the new Note 7.”

The smartphone sales cycle is finely choreographed with a lot of the sales of new devive coming in the months immediately after launch. This is why Samsung launches the Note in September, but before the iPhone and it’s the disruption to this timing rather than the cost of the recall that will be most damaging to Samsung.