《TAIPEI TIMES 焦點》 Samsung drops Galaxy Note 7 amid problems

WORLDWIDE: The South Korean firm said it was ending the production and all sales of the Note 7, a move that boosted a local smartphone maker’s shares

/ Staff writer, with agencies

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Samsung Electronics Co yesterday dropped its flagship Galaxy Note 7 smartphone less than two months after its launch, halting sales and exchanges worldwide following reports that replacements for combustible models were also catching fire.

The development boosted share prices of local smartphone maker HTC Corp （宏達電） and other firms in Apple Inc’s supply chain.

“[We] have decided to halt production and sales of the Galaxy Note 7 in order to consider our consumers’ safety first and foremost,” the South Korean firm said in a filing to the Seoul stock exchange.

HTC shares surged 5.69 percent to close at NT$94.8 after the announcement.

Market analysts said the decision might lift the sales of Google’s newly launched Pixel smartphone, which is solely manufactured by HTC.

Apple might also gain sales momentum for its iPhone 7, therefore benefiting local assemblers Hon Hai Precision Industry Co （鴻海） and Pegatron Corp （和碩）.

Hon Hai’s stock price rose 1.38 percent to NT$81.1, but Pegatron fell 0.12 percent to close at NT$80.7, Taiwan Stock Exchange data showed.

Samsung’s decision hurt its share price, which closed down 8 percent at 1.54 million won in Seoul trading, following a 1.5 percent drop on Monday.

Samsung’s announcement came a little more than a month after it announced a recall of 2.5 million Note 7s in 10 markets following complaints that its lithium-ion batteries exploded while charging.

The unprecedented move has turned into a public relations disaster and the situation only worsened when reports emerged a week ago of replacement devices also catching fire.

“The reason consumers prefer brands like Samsung and Apple is because of product reliability... So in this case, brand damage is inevitable and it will be costly for Samsung to turn that around again,” HMC Investment Securities’ Greg Roh said.

A number of major distributors, including AT&T Inc in the US and Germany’s T-Mobile International AG had unilaterally suspended sales and exchanges of the model on Sunday.

Samsung had already advised all customers with an original or replacement Galaxy Note 7 to “power down and stop using the device” immediately — a warning echoed by US Consumer Product Safety Commission Chairman Elliot Kaye.

“No one should have to be concerned their phone will endanger them, their family or their property,” Kaye said in a news release.

The US Federal Aviation Administration also issued a guidance update, urging all passengers to power off and not use, charge, or stow in checked baggage, any Samsung Galaxy Note 7 device.

Additional reporting by Lauly Li

新聞來源：TAIPEI TIMES