Samsung suspends Galaxy Note 7 production: report

Samsung reportedly suspended production of its Galaxy Note 7 and all major U.S. carriers stopped selling the flagship phone after multiple reports of replacement devices catching fire.

The Korean vendor said it was “temporarily adjusting the Galaxy Note 7 production schedule to take further steps to ensure quality and safety matters,” according to a Wall Street Journal report this morning. The move follows multiple reports of batteries in replacement devices overheating.

Both the Federal Aviation Administration and the U.S. Consumer Product Safety Commission (CPSC) are investigating reports that a Samsung Note 7 caught fire aboard a Southwest Airlines flight preparing for departure from Louisville, Kentucky, last week. The plane was evacuated and no one was injured.

The owner of the device said it was one of the replacement phones that the Korean electronics vendor has scrambled to produce following the nationwide recall of the first 2.5 million Note 7 models it sold. Analysts have estimated the company could lose $5 billion in revenue after accounting for the cost of recalling all those units.

Samsung hasn’t confirmed any problems with its replacement devices overheating, but it said Sunday that it is cooperating with authorities, including the CPSC, to investigate recent reports, the Journal reported.

Meanwhile, all four major U.S. wireless carriers have stopped selling replacement Note 7 phones. Verizon, AT&T and T-Mobile have also stopped issuing replacement Note 7 phones to customers who return recalled devices.

All four operators are offering to replace the Note 7 with other smartphones.

Samsung may be forced to issue a second worldwide recall for the Note 7, which would extend its nightmare as the vendor enters the all-important holiday shopping season in a very competitive market. Apple continues to see strong demand for the iPhone 7 thanks in part to carrier promotions that one analyst described as “unprecedented.” And Google is already investing millions to market the Pixel, its new phone aimed at the high end of the market.

Samsung remains the largest smartphone vendor in the world, and the company continues to see strong demand for the Galaxy S7, which launched in March to rave reviews. But the electronics giant risks ceding a significant chunk of the high end of the smartphone market at a crucial time.

For more:

- see this Wall Street Journal report

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