Samsung sends its Galaxy Note7 to the graveyard

Singapore

BARELY two months after its release, Samsung has decided to discontinue production and sales of its embattled Galaxy Note7 Android smartphone.

The South Korean tech company has also told owners of the device, including those who have collected a replacement handset, to power down the unit and to stop using it immediately.

This news comes a day after it announced a temporary halt to production, and stopped its partners from selling or exchanging the device globally.

A company spokesman said: "For the benefit of consumers' safety, we stopped sales and exchanges of the Galaxy Note7 and have consequently decided to stop production."

In Singapore, Note7 sales have been suspended since Sept 2; a nationwide replacement exercise was carried out two weeks ago.

The call to power down and stop using the device follows reports that even replacement handsets were catching fire and exploding.

Samsung's woes began a little more than a month before the replacement exercise, following complaints of its lithium-ion battery exploding while being charged. The world's largest smartphone maker recalled 2.5 million Note7s from 10 markets in response.

The company had initially pinpointed the battery as the cause of the problem. It switched suppliers, but the issue persisted.

Meanwhile, Samsung Singapore has not indicated whether it will replace the Note7 with another model, or offering a refund to its customers.

A local company spokesman said: "Samsung Electronics Singapore is in talks with our telecommunication operator and retail partners to work out a resolution for our Galaxy Note7 customers. Details of the remedy will be shared very soon.

"In the meantime, Galaxy Note7 customers who require a courtesy device on loan, subject to stock availability, can visit the Samsung Customer Service Centre at Westgate (shopping mall) during operating hours."

The unprecedented global phone exchange attracted criticism from the start, and become a public-relations disaster for Samsung. Its latest statement has not gone down well with local customers, who have already gone through one exchange, only to be told now to shut down their S$1,168 phone.

Dozens of owners have gone to the Samsung Mobile Singapore Facebook page to vent their frustration at the lack of instructions by the company. Many are asking for a full refund.

Facebook user Cindy Teng wrote: "How many times do you expect us to go to your service centre? I have had three units of Note7 now. It's not exactly in central Singapore. Are you compensating me for my time and travel?"

One issue raised in the Facebook comments is that in markets such as Australia, New Zealand, Taiwan and the United States, Samsung has offered full refunds to customers during the exchange. This option has not been offered in Singapore.

A petition at Change.Org, asking Samsung Singapore to offer customers a refund, has been signed by more than 700 people.

User Ang Shy Huey, 39, who works in the hospitality industry, said the lack of immediate information on getting a replacement phone is the most frustrating part of the saga.

"This is a huge inconvenience because the Note7 also serves as my work phone. Telling us to stop using it without giving a replacement set is setting back my work, especially when I'm travelling."

The decision to pull the plug on the Galaxy Note7 comes at a time when leading competitor Apple has launched its new iPhone 7 devices; Samsung's software partner Google launched its Pixel smartphones last week.

Analysts have calculated that Samsung would have sold 12 million Note7 phones this year. Killing it will drive sales to its competitors.

Shares for Samsung Electronics Co Ltd fell to their lowest level in nearly two months in September, and wiped 15.9 trillion won (S$19.7 billion) off the company's market capitalisation when news of the issue broke.

Samsung shares plunged 8 per cent by the close of trade on Tuesday, its biggest one-day decline in eight years.

The extended issues with the Note7 is expected to damage the brand for a while. Greg Roh at HMC Investment Securities said: "If it's once, it could be taken as a mistake. But for Samsung, the same thing happened twice with the same model. There's going to be a considerable loss of consumer faith.

"The reason consumers prefer brands like Samsung and Apple is product reliability . . . so in this case, brand damage is inevitable and it will be costly for Samsung to turn that around."