Samsung Releases Note7 Return Details Following Its Recall

By Todd R. Weiss  |  Posted 2016-10-13 Print this article Print
Note7, Note7 fires, Note7 recall, Note7 replacement, CPSC, smartphones, smartphone recall, smartphone fires, battery fires, Samsung

The lowered profit and revenue estimates come after Samsung weathered a five-week firestorm of negative news reports about battery fires and explosions affecting at least 100 Note7 smartphones since the devices went on sale in late August.

Adding to Samsung's misery, those first Note7 fire reports were followed by apparent fire problems with the replacement phones issued after a global recall of the original devices. Samsung ultimately pulled the plug on the production and sales of Note7s on Oct. 11, relegating the model to be a poster child for a failure of costly proportions.

The scrapping of the Note7 came just a day after Samsung announced on Oct. 10 that it was temporarily suspending its production of the handsets after at least two reports surfaced about fires or explosions involving replacement Note7 handsets that were manufactured after the battery problems were supposedly corrected. In addition, sales and warranty exchanges of the handsets were also being stopped while investigations into the reports continued.

Samsung addressed the initial Note7 fire reports by investigating the affected devices and starting its own global recall, and then in September cooperated with CPSC regulators who issued a government recall of a million of the handsets.

Samsung's downward revision of its third-quarter earnings estimates follows what had been very promising second-quarter results. In July, the company posted a $7.19 billion second-quarter operating profit (8.14 trillion KRW), up 18 percent from the 6.9 trillion KRW posted a year prior. The second-quarter figure was Samsung's highest operating profit in two years since it brought in 8.49 trillion KRW in the first quarter of 2014.

The second-quarter appeared to be a bright spot for the world's largest smartphone maker, which had been struggling with some tough earnings reports in recent years as it battled successful global sales challenges from rival smartphone makers, including Apple and Chinese upstarts such as Huawei.



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