Samsung Halts Note 7 Production After New Fire Scare

Samsung Electronics Co Ltd suspended production of its flagship Galaxy Note 7 smartphones, a source said on Monday, after reports of fires in replacement devices added to the tech giant's worst ever recall crisis.

According to Reuters, top U.S. and Australian carriers also suspended sales or exchanges of Note 7s, while major airlines reiterated bans on passengers using the phones, after smoke from a replacement device forced the evacuation of a passenger plane in the United States last week.

Fires in phones that were meant to replace devices that had been recalled because of their propensity to explode would be a disaster for the world's largest smartphone maker, suggesting it has failed to fix a problem that has already hurt its brand and threatens to derail a recovery in its mobile business.

"If the Note 7 is allowed to continue it could lead to the single greatest act of brand self-destruction in the history of modern technology.
"Samsung needs to take a giant write-down and cast the Note 7 to the engineering hall of shame next to the Ford Pinto," said brand strategy expert and chairman of Reputation Management Consultants, Eric Schiffer.

In a regulatory filing, Samsung said it was "adjusting" shipments of Note 7s to allow for inspections and stronger quality control due to some devices catching fire.
It did not comment on the production halt or the cause of the fires, while the source - who declined to be identified because they were not authorized to speak to the media - did not explain whether specific problems had been identified or when production was halted.

Samsung told Reuters earlier on Monday it was investigating reports of "heat damage issues" and would take immediate action to fix any problems in line with measures approved by the U.S. Consumer Product Safety Commission.

On September 2, Samsung announced a global recall of 2.5 million Note 7s due to faulty batteries, which caused some of the phones to catch fire.
It ordered new batteries from another supplier and started shipping replacements to customers just two weeks later. But similar problems arose with a replacement Note 7 on October 5, which began smoking inside a Southwest Airline flight in the United States.