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Home BUSINESSSamsung adjusting Galaxy Note 7 supply after production halt report
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Mon, 10 Oct, 2016 08:23:18 PM
FTimes- Xinhua Report, Oct 10
 
File Photo AFP-Lehtikuva
Samsung Electronics said Monday that it is now adjusting the supply of its fire-prone Galaxy Note 7 smartphones after a local media report that the South Korean tech behemoth has temporarily halted its faulty phone production.
 
The company said in a regulatory filing that the supply adjustment is underway for the sake of precision investigation and enhanced product quality control caused by recent reported damages from Galaxy Note 7s catching fire.
 
It added regulatory filing will be re-announced within a month or when details on it are determined.
 
The filing was a reply to the request of Korea Exchange, local bourse operator, to make sure rumors that Samsung may permanently stop sales or production of the model.
 
The filing indicated the company has no plan to abolish the product.
 
It also followed Yonhap news agency's report that Samsung has suspended the production of Note 7 phones on reported cases of replacement phones catching fire or overheating.
 
An unnamed official at a Samsung supplier was quoted by Yonhap as saying the production of Note 7 devices was halted in factories including those in Vietnam that are in charge of manufacturing the devices to be shipped globally.
 
The official said he heard that the decision was made in consideration of consumer safety in the United States as well as in China and South Korea.
 
Samsung is investigating fire incidents in cooperation with the authorities of the three countries, planning to take additional measures if necessary.
 
The supply adjustment came as multiple cases of overheating were reported even from replacement Note 7s. A Southwest Airlines flight in the U.S. Kentucky was evacuated last week as one replacement Note 7 emitted smoke.
 
Some of U.S. mobile carriers, including AT&T and T-Mobile, stopped or suspended selling the new Note 7 phones while advising consumers to exchange the phones with other smartphones.
 
Eight cases of the Note 7 phones catching fire or overheating were reported globally, including five in the United States, one in South Korea, one in China and one in China's Taiwan.
 
About 450,000 new Note 7s have allegedly been given to consumers in South Korea alone, including some 350,000 replacement phones. Samsung resumed the sales of the devices here beginning Oct. 1.
 
Galaxy Note 7 made its debut in August with rave reviews, but Samsung stopped global sales of the phones two weeks later as dozens of the devices catching fire were found and caused property damages and injuries.
 
The company began to exchange older models with new ones later last month, but fire cases were reported even with the new phones and replacement devices.
 
 If confirmed, problems with Samsung's battery cell and its consequent production halt would delay the resumption of Note 7 sales and the replacement process that could increase damages to Samsung's brand image and earnings.
 
According to preliminary figures unveiled by Samsung last week, the company's third-quarter revenue was 49 trillion won (44 billion U.S. dollars), down 5.19 percent from a year earlier. From the previous quarter, the revenue declined 3.81 percent.
 
It is estimated that Samsung suffered about 1 trillion won in losses from the Note 7 recall, but the exact figure would be announced later this month after an external audit.
 
The South Korean tech behemoth posted 7.8 trillion won in operating profit during the July-September period, up 5.55 percent from the same period of last year.
 
It was down 4.18 percent from 8.14 trillion won tallied in the previous quarter, which was the largest in more than two years.  
 
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