After its second successive battery disaster, Samsung is officially ending production of the Galaxy Note7, realising that the phone’s reputation – and build – is beyond saving at this point.
The Galaxy Note7 has now become synonymous with failure at this stage, following the original discovery of a battery overheating issue on the first production builds of the phone.
Weeks later, after a concerted – and expensive – effort to recall and replace the phones, there was another major incident whereby the replacement battery caught fire aboard a passenger aircraft.
As well as the recall, Samsung has also tried to avoid further disaster by issuing a software update that would limit the battery’s capacity to just 60pc.
Yet as of this morning, it was becoming apparent that any hope of saving the device a third time was doomed to fail, with Samsung issuing a plea for Note7 users to stop using it immediately and for stores to stop selling all versions of the device.
Now, the death knell has been rung for the Galaxy Note7, as Samsung has officially confirmed that it is beyond the point of saving: all production of the phone will cease immediately.
The $17bn phone
“Taking our customers’ safety as our highest priority, we have decided to halt sales and production of the Galaxy Note7,” said Samsung in a statement to the Wall Street Journal.
The resulting share price of Samsung has been hit hard by the PR disaster, with its shares tumbling 8pc in the space of one day – its biggest decline in eight years.
This would far surpass its 1.2pc shares pullback following the announcement to owners of the device to stop using it.
The damaging effect on the South Korean giant didn’t go unnoticed by the country’s government. It was confirmed that the country’s finance minister, Yoo-Il-ho, was monitoring the Samsung’s recall strategy today (11 October).
In terms of what financial cost this entire debacle will inflict upon Samsung, Reuters has estimated that the company’s bank balance will be hit to the tune of $17bn to withdraw and deal with any fallout from the sale of the phone.