Samsung Killed the Galaxy Note7 Entirely and Just Lost $18 Billion
To put it lightly, Samsung’s Galaxy Note7 has been a big, flaming disaster. Following reports of the phone’s battery exploding at random -- and occasionally searing the flesh of anyone brash enough to use one -- the Korean tech giant has finally ordered production of the phone to stop, and asked all global partners to immediately stop sales and exchanges of the device.
It’s a fitting end to one of the most bizarre (and probably embarrassing) quandaries ever faced by a smartphone manufacturer. In a statement on Tuesday, Samsung cited “consumer safety” as the impetus for killing the Note7, saying, “We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.” Yesterday, Samsung and the US Consumer Safety Commission ordered all customers to power down their devices.
While calamitous news for Samsung, the Note7 had been in a downward death spiral for over a month: In early September, the company asked customers to participate in a replacement program, just a week after announcing a voluntary recall affecting 2.5 million phones. At that point, there had already been 35 cases of the phone catching fire and sometimes maiming customers, but since then, the episodes have snowballed: A Note7 caught fire on a Southwest Airlines flight (thankfully while the plane was taxiing) and set a man’s jeep on fire in Florida. Incidents like these -- which were amplified on social media -- occurred after Samsung had allegedly fixed its battery cell issue and started an exchange program to win back hesitant customers.
Killing off its flagship mobile device has also caused a devastating financial blow for Samsung. According to NBC, Samsung shares closed at 8 percent lower on Tuesday following the announcement, resulting in an $18 billion loss on the company's valuation. If that sounds like an unmitigated catastrophe, it's because it is.
As The New York Times notes, this is the first time a major smartphone manufacturer has halted production on a device, especially one as popular as the Note7. It’s probably a bit surreal for Samsung, especially considering the Note7’s early hype. It was originally viewed as a legitimate threat to Apple’s stronghold on the smartphone market, but it’ll be remembered more as a nightmare.
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Sam Blum is a News Staff Writer for Thrillist. He's also a martial arts and music nerd who appreciates a fine sandwich and cute dogs. Find his clips in The Guardian, Rolling Stone, The A.V. Club and Vice. He's on Twitter @Blumnessmonster.