Samsung halt sales & production of the Galaxy Note 7 over explosion issues
Tech giant Samsung has killed off the Galaxy Note 7 in the hope of limiting the fallout from its exploding smartphone fiasco.
The South Korean firm decided Tuesday to permanently halt sales and production of the Galaxy Note 7 just hours after telling customers to stop using all versions of the smartphone. Its stock plummeted 8% in Seoul, wiping about $17 billion off the company’s market value.
The high-end phone was supposed to do battle with Apple‘s (AAPL, Tech30) iPhone 7, but instead ended up doing serious damage to Samsung’s reputation.
Analysts say Samsung‘s (SSNLF) move to ditch the Note 7 entirely would be costly — it could put a $9.5 billion dent in sales and erase $5 billion in profits, according to one estimate. But the risk of prolonging the agony was worse.
“It’s a painful move but perhaps not an entirely bad one in the grand scheme of things, as it helps isolate and contain the bad perception to that specific product rather than spreading fear that all Samsung phones might explode,” said Bryan Ma, vice president of device research at IDC.