Samsung has halted sales of Galaxy Note 7 smartphones in India and recalled thousands of devices sold globally after a few cases of battery explosion while charging were reported. The recall comes at a critical time for Samsung as Apple prepares to unveil its latest iPhone on September 7.
The South Korean consumer electronics major had launched the Galaxy Note 7 last month in India at a price tag of Rs 59,900. The device was to be made available in the Indian market from Friday. Traditionally, Samsung has countered its closest competitor with a blockbuster launch right before or after Apple unveils its products.
Koh Dong-jin, head of Samsung’s smartphone business, expressed regret over the global recall at a news conference on Friday. The recall comes just weeks after the launch of Samsung’s latest premium phone, which features an outsized screen and high-resolution camera, and follows reports of the phone igniting while charging.
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SAMSUNG GALAXY NOTE 7
Koh, who declined to comment on the number of phones needing replacement, said Samsung had sold 2.5 million of the premium devices so far. The manufacturer plans to replace not only phones with faulty batteries sold to consumers, but also retailer inventories and units in transit. Nomura estimated that more than 1 million units have been sold to end consumers. “I can’t comment on exactly how much the cost will be, but it pains my heart that it will be such a big number,” he said.
In India, a market where Samsung is way ahead of Apple, a company spokesperson said the firm would delay sales of the Galaxy Note 7 in view of customer safety. “To date (as of September 1) there have been 35 cases (of fire) that have been reported globally and we are currently conducting a thorough inspection with our suppliers to identify the possibly-affected batteries in the market,” he said.
The company, however, did not specify a timeline for the device to be made available in the Indian market. “We acknowledge the inconvenience this may cause in the market but this is to ensure that Samsung continues to deliver the highest quality products to our customers,” the spokesperson added.
The Galaxy Note 7 was unveiled by Samsung in India on August 11, nearly a month ahead of iPhone 7 launch, in a bid to steal the thunder from the latter.
“The timing of this mishap is bad. While it has happened at the initial phase of the launch rather than bang in the middle of the festive season, Samsung is still losing critical time as the iPhone 7 launch is very near now. Also, this incident will lead to loss of brand value for them and Apple may exploit it in its ad campaigns. Last time when issues with the iPhone came to the fore, Samsung did exactly the same. The Note 7 has been highly regarded by most reviewers. But this episode could impact the Note series’ image in the future,” said Tarun Pathak, senior analyst, Counterpoint Market Research.
For Apple, Samsung’s glitch with its latest product has come as a blessing in disguise at a time when the former is losing its market share. In the March 2016 quarter, Apple’s market share in the above-Rs 20,000 price segment in India was 52.3 per cent, backed by higher sales of 5S, 6 & 6S. This, however, fell to 35.6 per cent in June 2016 quarter, according to IDC India. Apple’s market share in major urban Indian centres continues to fall since December 2015 quarter.