Some 85 percent of Samsung's troubled Galaxy Note7 smartphones have been returned since a massive recall in September and October due to battery fires and explosions, but the company is still working to get the remaining phones returned from customers as soon as possible.
To encourage the remaining Note7 owners to return the recalled phones, Samsung is releasing a software update that will cut the available charging capacity of the recalled handsets to 60 percent so they will have shorter battery lives, the company announced in a Nov. 4 statement.
"As of today, nearly 85 percent of all recalled Galaxy Note7 devices have been replaced through the U.S. Note7 Refund and Exchange Program, with the majority of the participants opting to receive another Samsung smartphone," the company said in the statement. "We remain focused on collecting the outstanding Galaxy Note7 phones in the market. To further drive participation, we will be releasing a software update in the coming days that will limit the phone's ability to charge beyond 60 percent, as well as issue a reminder pop-up notification every time a consumer charges, reboots or turns on the screen of their Note7 device."
The Note7, which went on sale in late August and almost immediately was the subject of reports of battery fires and explosions, was completely dropped from sales and distribution on Oct. 11 by Samsung. The handsets had been recalled by the U.S. Consumer Product Safety Commission (CPSC) due to at least 100 reports of fires and explosions from consumers.
After the government recall of the defective phones, Samsung re-released the handsets with batteries from a different supplier, thinking that the change had solved the fire issues. But battery fire reports continued to surface, even in the "new" phones with the different batteries, according to earlier eWEEK stories.
With 85 percent of the defective Note7 phones back from customers, getting the remaining handsets back and out of harm's way is important to Samsung. In late October, the Federal Aviation Administration issued a ban on Note7 handsets on all U.S. flights due to their fire dangers. The FAA ban was issued to prevent the possibility of the phones causing dangerous fires being aboard aircraft.
Any Note7 customers who still have their original or replacement handsets continue to be told by Samsung and by the CPSC to power down their smartphones immediately and exchange them for another Samsung smartphone, including a Galaxy S7 or Galaxy S7 Edge, or seek a full refund where they bought their devices. Consumers who have questions about what to do with their phones can go to the company's website at samsung.com/us/note7recall, or call the company at (844) 365-6197.
The Note7 is a 4G LTE phone with all-new iris-scanning capabilities for security, an integrated S Pen stylus, a first-ever "Secure Folder" feature and other updates aimed at making users productive and creative. It is slimmer and more rounded compared with the previous version, the Note 5, which debuted in August 2015.
Samsung continues to seek the root cause of the Note7 fires so it can prevent similar problems in the future, according to an earlier eWEEK report. Lab tests of defective phones showed unexpected protrusions in some batteries from the original supplier, but were not conclusive, the report stated.
Samsung's third-quarter earnings were hit hard by the Note7 debacle as the company's operating profit fell 30 percent to $4.6 billion (5.2 trillion Korean won, KRW) from $6.4 billion (7.39 trillion KRW) a year ago. The company's mobile division operating profit was particularly devastated by the Note7 failure, declaring an $88 million (100 billion KRW) operating profit in the third quarter, down 96 percent from $2.09 billion (2.4 trillion KRW) in the third quarter of 2015. The company's mobile division revenue fell to 22.54 trillion KRW in the quarter from 26.61 trillion KRW in 2015. Overall, Samsung's revenue for the third quarter, which it reported on Oct. 27, totaled 47.82 trillion KRW, down 7.47 percent from 51.68 trillion KRW in the same quarter in 2015.
Earlier in October, Samsung estimated that it would see further earnings consequences in its future fourth-quarter 2016 results and in its first-quarter 2017 results due to the Note7 failure. The company said at the time that it expected a "negative impact" on its operating profits of approximately $3.1 billion (about 3.5 trillion KRW) combined for the fourth quarter of 2016 and the first quarter of 2017. That is on top of the negative financial impacts reported in the third quarter. The lower profits in the next two quarters are expected to be about 2.5 trillion KRW in the fourth quarter of 2016 and about 1 trillion KRW in the first quarter of 2017, due to the Note7 recall, the company stated.