Samsung has asked all retailers across the globe to stop selling and exchanging its Galaxy Note7 smartphone, and has instructed all owners of the phone to power it off and seek a refund or replacement.
The phone was originally recalled after a battery issue lead to several reported cases of overheating and combustion. In recent weeks there have been at least five cases of replacement Note7's also catching fire or overheating.
While the Korean company was recently reported to have stopped making Note7s as it investigated the reports, it has always been careful to state it believes the new phones are safe, or that the issue is "limited". In its latest statement on Tuesday morning, Samsung is more direct.
"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", the statement reads.
"Consumers with either an original Galaxy Note7 or replacement Galaxy Note7 device should power down and stop using the device and take advantage of the remedies available."
In Australia, as well as around the world, many retailers and telcos had already stopped selling or replacing Note7s. Vodafone has said it will replace customers' Note7 with a Samsung Galaxy S7 Edge, with Telstra and Optus both also indicating they would swap the handset for an alternative phone.
Before the exploding batteries, Samsung had defied a slowing smartphone market with better-than expected Galaxy sales and successfully capitalised on a lull in demand for new iPhones. In recent months, Samsung had expanded its already considerable market share. The company shipped 77 million smartphones in the second quarter, according to IDC.
Now the South Korean company enters the crucial holiday shopping season with no large-screen smartphone. Because Samsung and Apple have basically split the market for premium-priced smartphones between them, the latter is a natural beneficiary of Samsung's woes.
Investors seem to expect that to happen and pushed Apple shares up 2.1 per cent on Monday in New York, the highest level since December 2015. In the long-term, Apple could attract Android users to its "sticky iOS ecosystem, which boasts around a 95 percent loyalty rate," Credit Suisse Group AG analyst Kulbinder Garcha wrote in a note.
Google will also provide an alternative large-screen this holiday season, alongside a smaller version, with the Pixel, the first phone to carry the company's name.
With Bloomberg
