Samsung kills Galaxy Note 7 brand name, shares plummet by 8%

Samsung Note 7 recall has lead to massive losses amounting to $17 billion in write-offs, lost profit and other expenses.

Galaxy Note 7
Samsung Galaxy Note 7 on fire

Samsung has finally decided to discontinue production of its troubled Galaxy Note 7 flagship device after multiple instances of its battery explosions were reported in the past few weeks. Just a few days ago, several Note 7 replacement units were found catching fire accidentally and were deemed unsafe for use.

Consequently, several major US carriers including Verizon, Sprint, T-Mobile and AT&T have resorted to offering free replacement devices from any brand including Apples newest iPhone to existing Note 7 owners.

Samsung was reportedly quoted in a filing with South Korean regulators that it was permanently ceasing production of the device over "customer safety" concerns. In addition, the company has also issued directives to halt sales and exchanges of the Note 7 device across all global partners, retailers and resellers while it investigates into the exploding-battery problem.

Meanwhile, a Samsung spokeswoman has confirmed to TechCrunch that the company has stopped further production of Galaxy Note 7 units with customer safety as its top priority.

We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers' safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.

As a safety measure the company has requested Note 7 owners to desist using the phone and take advantage of various exchange-offers and refunds available at their fingertips.

On the contrary, the South Korean finance minister Yoo II-ho has hinted that the country's exports could take a hit, following the discontinuation of the Note 7 device. He also added that scrapping the flagship model could have a negative impact on the export business of the country.

On the flip side, the United States Consumer Product Safety Commission's chairman Elliot Kaye has commended Samsung's decision to discontinue production, sales and exchange of Note 7 units.

An earlier Bloomberg report clarifies that Samsung's decision to launch the Note 7 ahead of the schedule in an effort to capitalise on the dull iPhone 7 sales, has lead to the exploding-battery problems even with the replacement units.

Consequently, such a hasty move could have killed the Note 7 brand name, according to Edward Snyder, managing director of Charter Equity Research.

"By the time they fix the problem they have to go through recertification and re-qualification and by the time that happens, they're going up against the Galaxy S8 launch," added Snyder.

In related news, Samsung shares are down by 8% with an additional 9.5% fall in London trading, besides a net loss of $18.8 billion (bn) in the company's overall market value. It is estimated that the company incurred huge losses owing to the Note 7 recall amounting to $17bn in write-offs, lost profit and other expenses.

It could take several years for Samsung to recover customer faith and financial setbacks in the aftermath of the Note 7 debacle.

Related topics : Samsung