Samsung Archives – Page 2 of 17 – My Blog

Royal Mail Plc, operator of Britain’s main postal service, said on Wednesday it had banned the delivery of Samsung’s Galaxy Note 7 smartphones through its network for safety reasons, making it potentially difficult for many Britons to return the recalled devices.

Samsung recalled about 2.5 million Galaxy Note 7s last month after reports some had caught fire due to faulty lithium batteries, and the company said on Tuesday it would stop making the devices after fires were reported in replacement phones.

Royal Mail said the ban also applied to its Parcelforce UK and international courier service.

The company said it would ask customers to detail the contents of their packages to ensure that hazardous items such as faulty lithium batteries were not transported.

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Samsung may have dug itself into a hole too deep to come out unscathed. The company is in the process of unprecedented second recall, after ‘safe’ Galaxy Note 7 replacement units also started to catch fire. While the engineers at Samsung cannot pin down a solid reason for these explosions, a report suggests that the SoC is to blame, and not the battery.

A Financial Times report states that the explosions are being caused due to an SoC tweak made by company’s engineers with the aim to speed up the charging process. However, the battery could not handle the rate at which it was being charged, and this is causing the handset to catch fire and explode.

“If you try to charge the battery too quickly it can make it more volatile. If you push an engine too hard, it will explode. Something had to give. These devices are miracles of technology – how much we can get out of that tiny piece of lithium-ion,” the report writes, citing a person informed by Samsung executives.

This is in no way confirmed by Samsung, and the company still maintains silence on that front. There is no official word on what is causing the safe units to catch fire, and Samsung engineers are also reportedly unable to narrow down a flaw.

For now, Samsung has completely halted production and global sales of the Galaxy Note 7. The controversy is said to be costing the company billions of dollars, not to mention attract heaps of ill will in the market. In the most recent cases, a Samsung Galaxy Note 7 was caught on video catching fire at a Burger King, and a US plane was immediately vacated after a replaced unit started emitting smoke.

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In a move that could cost the company billions, not to mention the priceless goodwill of the market, Samsung has completely halted production of the Galaxy Note 7. After the ‘safe units’ started to catch fire, the South Korean electronics giant was forced to shut down its manufacturing engine off for pure safety reasons. Now, a fresh report states that Samsung’s move is mostly because it has no clue on what is causing the fire, and its team of hundreds of engineers are stumped. The main cause of halt in production and uncertainty of future moves is because the Samsung team is unable to isolate the cause of these explosions.

The New York Times cites an anonymous internal source from the company, and claims that after the safe units started catching fire, Samsung’s entire engineering team went back to work to find a solution, but hasn’t found one even after conducting many tests for over a week.

Early in August, Samsung had touted the Galaxy Note 7 to be the best Note device so far, and had even broken tradition to launch it a bit early to fend off competition from Apple. However, the move backfired terribly, and reports of many Samsung Galaxy Note 7 units exploding while on charge started coming in. Samsung had to then stop sales temporarily to assess the issue. Soon after, the company reportedly blamed an in-house SDI battery fault to be the cause of the problem, and restarted production and sales by sticking to one of its third-party battery providers. It even started to recall old handsets as a safety measure, and replaced them with new ‘safe units’.

However, safe units also started catching fire, and because Samsung was unable to find a solution, it just decided to halt production and global sales. It gave up trying to stay afloat without a life jacket, and just surrendered in silence.

Whether Samsung should bring back the Note 7 or kill it altogether for safety reasons is another debate altogether, but these series of events and the damage it has done to the brand’s reputation will take some time to recover. Furthermore, because of this fault, Samsung’s other product lines like refrigerators and washing machines are also now in the scanner.

The Galaxy Note 7 has managed to cause a scare on planes, set a jeep on fire, and incurred damages of $1,400 to a hotel. While investigators take their time to find the new flaw, we just hope that casualties remain to a minimum, and that Samsung does everything in its power to remove these hazardous units off the market.

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Samsung Electronics Co. cut its third-quarter operating profit outlook by $2.3 billion (roughly Rs. 15,375 crores) after ending production of its fire-prone Galaxy Note 7 smartphones, the first sign of how much the crisis will cost South Korea’s largest company.

Profit will be KRW 5.2 trillion ($4.63 billion or roughly Rs. 30,953 crores) instead of KRW 7.8 trillion in the three months ended September, the company said in a regulatory statement Wednesday. That effectively erases all the mobile business profit that analysts had been projecting. Revenue will be KRW 47 trillion instead of KRW 49 trillion (roughly Rs. 2,91,384 crores). Samsung cut its guidance for the third quarter less than a week after it was first issued, as costs from the global recall escalated and it decided to kill off the Galaxy Note 7. The company has been scrambling for answers in the wake of reports that smartphones were exploding, including supposedly safe models.

“This is a huge cutback,” said Greg Roh, an analyst at HMC Investment Securities Co. “It means Samsung has reflected not only the sales loss from the shutdown but it also means it would bear the costs of the inventories of Galaxy Note 7s in the channel as well as the components they bought a few months back because they can no longer sell the Galaxy Note 7 at all.”

Wednesday’s announcement is the first time the company has put a price on the debacle; analysts had estimated it would cost at least $1 billion. Samsung’s shares have tanked this week as new fire reports emerged. The stock has slumped 10 percent in the past three trading days, wiping $21 billion (roughly Rs. 1,40,385 crores) from its market value.

Samsung’s mobile division was projected to report operating income of KRW 2.7 trillion (roughly Rs. 16,056 crores) in the quarter, according to estimates compiled by Bloomberg. Roh said the revised outlook probably erased that number. “We expected the mobile division to see about KRW 2.6 trillion previously but it will only see a mere KRW 0.3 trillion in the third quarter,” he said.

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The Samsung Galaxy Note 7 has been in the news for all the wrong reasons, and the company this week finally announced a halt to production and global sales of the smartphone due to safety concerns. Samsung further warned buyers to “power down and stop using the device (including replacements)” immediately, as they were fire hazards. However, not everyone has taken heed of that warning yet, and a new home security camera video has popped up on the Internet showing a Galaxy Note 7 catching fire and billowing smoke in a house in Honolulu.

The video footage, posted by Associated Press, shows a woman named Dee Decasa handling a smoking Galaxy Note 7 device with a great deal of composure and calm. However, due to the shock caused by this incident, she fainted in her living room near her sofa. Ironically, Dee Decasa had reportedly visited Samsung’s own website before the device started smoking.

Even though this event did not result in any serious injuries, it should serve as a wake-up call for those consumers who have not responded to the company’s request to stop using and power down their Samsung Galaxy Note 7 smartphones.

The South Korean company is currently trying to contain the damage that has been caused to its brand of smartphones but reports suggest that the second recall of the Galaxy Note 7 might end up costing the company as much as much as $17 billion.

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Investigators believe the latest incidents of Samsung smartphones overheating, which prompted it to abandon its Galaxy Note 7 model, may be the result of a flaw different from the one that caused the device’s original recall last month.

Preliminary examination of the evidence from recent battery incidents suggests there is an issue with the batteries made by China’s Amperex Technology Ltd., which were supposed to be a safe alternative to those supplied by another company that led to scores of incidents in which phones burned and melted, according to a person familiar with discussions between government agencies and the company.

The issue may have crept into the supply line after Samsung began replacing Galaxy Note 7 phones that were equipped with batteries made by Samsung SDI, said the person, who wasn’t authorized to speak publicly about the issue. The SDI batteries were slightly too large for the phone, according to a US consumer-safety agency. Samsung is a major shareholder in Samsung SDI.

The apparent new fault helps explain why Samsung would abruptly pull the plug on what was supposed to be its premier phone designed to compete against Apple’s iPhone 7. Amperex, a unit of Japan’s TDK Corp., didn’t respond to requests for comment on Tuesday. Samsung declined to comment.

TDK shares fell as much as 4.5 percent in Tokyo trading. Samsung SDI rose as much as 3.5 percent in Seoul.

Before the September 15 recall, there had been 92 reports of Galaxy Note 7 batteries overheating in the US, with 26 cases causing burns. Samsung and agencies investigating the latest failures haven’t released details about what they believe is causing the incidents.

Samsung is leaving at least some of its most valuable wireless carrier partners in the dark about the root causes of the battery issues, according to one carrier executive who asked not to be named. Samsung is asking some of its partners to share testing data, but the South Korea-based phone maker has not reciprocated with its own data, leaving carriers to deal with replacing phones and not providing customers with explanations of the problem, the executive said.

Reversed course
Samsung moved to recall its phones last month, offering replacements that it assured consumers were safe. Samsung reversed course this week after several of the replacement phones caught fire, shutting down production and asking retailers to stop selling all of the Galaxy Note 7s.

The move sent Samsung shares down 8 percent on Tuesday, vaporizing $17 billion in market value. Samsung’s sterling brand image built up over decades is at risk unless the management team led by Vice Chairman Jay Y. Lee, 48, doesn’t get out in front of the crisis soon.

The company has not said how many new or replacement phones will be affected by the latest announcement. Analysts estimated the original recall would cost between $1 billion and $2 billion, but that figure will likely rise. Chung Chang Won, an analyst at Nomura Holdings Inc., estimated in a research note before the company’s announcement the worst-case scenario of Samsung terminating the Galaxy Note 7 would cost the company about $5 billion in operating profit through 2017.

The incidents in the US are under investigation by the Consumer Product Safety Commission, which Monday issued a statement warning all owners of Galaxy Note 7s to power them off and stop using them.

When the agency announced an agreement with Samsung to begin a government-sanctioned recall on September 15, Chairman Elliot Kaye said batteries made by Samsung SDI had been built slightly too large for the compartment in the phone. Installing them had crimped the corner of the batteries, causing them to short circuit and overheat, Kaye said.

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Samsung suffered another blow in its effort to move past a crisis over exploding smartphone batteries, as customers reported problems with replacement devices and the company was forced to halt production of the Galaxy Note 7 phones.

Samsung has temporarily stopped making the high-end phones, a person with direct knowledge of the matter said Monday, asking not to be identified because the decision hasn’t been made public. The move came after wireless companies in the US and Australia stopped selling Galaxy Note 7s following reports that replacement devices thought to be safe were overheating and bursting into flames. Samsung shares fell as much as 4.6 percent in Seoul.

The Korean company was engulfed in controversy after its most expensive phone hit the market two months ago and customers began posting videos of devices that had exploded. Samsung quickly issued a recall and began working with officials worldwide to replace the original shipment of 2.5 million phones. But reports of fires from supposedly safe devices began emerging two weeks ago in China and then with replacements in the US, fueling concerns Samsung hasn’t solved the battery problems after all.

“It’s an ongoing nightmare,” said Bryan Ma, vice president of devices research for IDC. “You would have hoped that they could have gotten past this already and moved on. Clearly, it keeps coming back.”

AT&T and T-Mobile US both halted sales of the devices in the US over safety concerns, while Telstra Corp. followed suit in Australia. “Based on recent reports, we’re no longer exchanging new Galaxy Note 7s at this time, pending further investigation of these reported incidents,” AT&T Inc. spokesman Fletcher Cook said in an e-mailed statement on Sunday.

Suwon-based Samsung said it will take immediate steps approved by the Consumer Product Safety Commission if it finds a safety issue exists.

The production suspension raises questions about Samsung’s original investigation into the battery problems. The company said the issue stemmed from one supplier, which it had stopped using.

AT&T is the third-biggest customer of the South Korean company while T-Mobile’s parent is No. 4, according to estimates compiled by Bloomberg. Sprint Corp. said its exchange policy is unchanged while Verizon said the phone is out of stock at its stores.

Telstra, Australia’s biggest phone company, is offering alternative phones to customers as Samsung investigates the issue.

The latest imbroglio coincides with mounting pressure from investor Paul Elliott Singer, who this month advocated a break up of the complex Samsung empire. Singer’s Elliott Management Corp. – through affiliates Blake Capital LLC and Potter Capital LLC – proposed that Samsung separate into an operating company and a holding company, dual-list the former on a US exchange, pay shareholders a special dividend of KRW 30 trillion ($27 billion or roughly Rs. 1,79,617 crores) and improve governance by adding three independent board members.

Ma at IDC said the production halt will deal another blow to a smartphone that had won strong reviews when it first came out in August.

“They’ve invested so much in the product, which was supposed to be the product that helps turn the company around,” Ma said. “To their credit, it was doing really, really well. That’s why it’s such a shame it has developed the way it has.”

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Aviation regulator DGCA may issue a fresh advisory on the use of Samsung Galaxy Note 7 phones onboard aircraft after getting latest inputs from its US counterpart, Federal Aviation Administration (FAA).

The DGCA is already in touch with the FAA on the issue and the fresh advisory is likely to be put in public domain by next week, a senior DGCA official said, two days after a Samsung Galaxy Note 7 caught fire on a US airline flight.

Samsung officially recalled one million of its Galaxy Note 7 mobile phones sold before September 15 after finding that some of their batteries had exploded or caught fire.

Earlier, the Directorate General of Civil Aviation (DGCA) had completely banned the use of Galaxy Note 7 on board flights as also carrying them in checked-in baggage, which it partially lifted on September 30.

“The FAA guidelines prohibit carrying of Galaxy Note 7 device in the cargo, besides switching off all applications (in case of flight mode) as well as protecting the switch on/off button. We are touch with the FAA over the issue, and if it revisits these guidlines, we will also issue a fresh advisory on the use of device,” the official said.

The FAA guidelines issued on September 16 “prohibit air cargo shipments of recalled or defective lithium batteries and lithium battery-powered devices, and passengers may not turn on or charge the devices when they carry them on board a plane. Passengers must also protect the devices from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and must not pack them in checked luggage.”

The DGCA, in a public notice on September 12, had advised air travellers “not to turn on or charge the device and also not to stow them in their check-in baggage.”

However, it later allowed passengers to use the device purchased after September 15 which has “green battery charge indication”. The ban remains on Galaxy Note 7 having a white battery charge indication on the screen and manufactured before September 15, which has seen battery overheating.

A Southwest Airline flight from Louisville International Airport in Kentucky to Baltimore was reportedly evacuated on Wednesday after a passenger’s Samsung Galaxy Note 7 phone began smoking shortly before takeoff.

Samsung had said there was no evidence that this incident was related to the new Note 7 and that they were probing the matter.

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South Korea’s Samsung Electronics Co expects third-quarter profit grew 5.6 percent, beating estimates, as a pickup in chip and display earnings likely offset the impact of a global smartphone recall that has roiled the tech giant.

The world’s biggest smartphone maker said in a brief filing on Friday its operating profit for July-September was likely KRW 7.8 trillion ($7 billion), compared with the KRW 7.4 trillion tipped by a Thomson Reuters StarMine SmartEstimate of analysts’ forecasts. A year earlier operating profit was KRW 7.4 trillion.

The firm won’t issue full results until late October and gave no details on the cost of recalling about 2.5 million Galaxy Note 7 phones after batteries caught fire. Analysts have said the Galaxy Note 7 woes – rumbling on with Wednesday reports of a smoking battery in a replacement device – could have undercut mobile earnings by at least KRW 1 trillion (roughly Rs. 5,986 crores).

Revenue for the quarter likely fell 5.2 percent to KRW 49 trillion (roughly Rs. 2,93,352 crores), the South Korean firm said, less than the Thomson Reuters StarMine SmartEstimate of KRW 51.1 trillion.

“Obviously the Galaxy Note 7 recall costs were reflected but (business) segments such as memory and Oled (organic light-emitting diode) displays did well and will probably continue to do so until at least next year,” said IBK Asset Management fund manager Kim Hyun-su.

Samsung’s semiconductor business – the world’s top memory chip maker – is thriving as Apple and peers boost the global market, seeking chips for new iPhones and other products launched ahead of the peak year-end sales season. Germany’s Dialog Semiconductor Plc, an iPhone chip supplier, said on Thursday its revenue beat expectations.

Galaxy Note 7 Chip Boost?
Ironically, the Galaxy Note 7 problems could also boost Samsung’s chip business. Industry executives say the sudden need for chips in 2.5 million replacement phones is exacerbating already tight memory market conditions, which could push prices higher.

Paul Romano, chief operating officer at US-based electronic component distributor Fusion Worldwide, said the firm’s clients, which include Samsung, are currently having a harder time procuring memory chips. Some smartphone makers are also trying to secure more of the chips as they see an opportunity capitalise on Samsung’s mis-steps and boost handset sales, Romano said.

“Sometimes this creates a seize mentality – everyone tries to manage the risk,” said Romano. “Often the response is to procure new product, trying to grab what’s left of a shrinking pile of supply.”

Researcher TrendForce says contract prices for DRAM chips – used in temporary data usage – will rise by more than 10 percent in October-December. Demand is outpacing supply in the market for NAND chips used for long-term data storage during the third quarter, the researcher added, tipping prices to continue rising.

Samsung shares were up 0.5 percent at KRW 1.7 million at 0220 GMT (7:50am IST), compared with 0.3 percent fall for the broader market.

The stock touched a record high of KRW 1.716 million on Thursday after Samsung said it was “carefully reviewing” the proposals by activist investor Elliott Management for a radical corporate makeover that would split Samsung Electronics into a holding vehicle for ownership purposes and a separate operating company.

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Samsung could face an unusual second recall of its Galaxy Note 7 smartphones if one that caught fire aboard an airliner this week is a replacement device as its owner says, two former US safety officials said.

The Federal Aviation Administration and the Consumer Product Safety Commission are investigating Wednesday’s incident, when a passenger’s phone emitted smoke on a Southwest Airlines Co. plane readying for departure from Louisville, Kentucky. A flight attendant doused it with a fire extinguisher, and the plane was evacuated without injury.

“If it’s the fixed phone and it started to smoke in his pocket, I’m going to guess there’ll be another recall,” said Pamela Gilbert, a former executive director of the consumer agency. “That just doesn’t sound right.”

Samsung has been engulfed in crisis since the Galaxy Note 7 smartphones began to burst into flames just days after hitting the market in August. The Suwon, South Korea-based company announced last month that it would replace all 2.5 million phones sold globally at that point. Samsung said it had uncovered the cause of the battery fires and that it was certain new phones wouldn’t have the same flaws.

The first indications of the existing recall’s financial impact could be seen Friday with the company’s release of earnings that rose at the slowest pace in five quarters. Operating income increased just 5.5 percent to KRW 7.8 trillion ($7 billion or roughly Rs. 46,812 crores) in the three months ended September 30.

China incident
The US safety commission could decide as early as next week on what steps to take, said Gilbert, a partner in Cuneo Gilbert & LaDuca, LLP in Washington. “This is not something you want to leave hanging out there,” she said.

Nancy Nord, a former acting chairwoman of the safety commission, said a second recall doesn’t happen very often.

“Certainly they could do another recall, if it appears this is something beyond an aberration,” she said.

“They need to determine if this was a remediated phone, and if so why did this happen?” said Nord, who is of counsel at Olsson Frank Weeda Terman Matz PC in Washington.

CPSC spokesman Scott Wolfson declined to comment on what action may be taken.

Bloomberg News last week interviewed a customer in China who said his new Galaxy Note 7 had exploded less than 24 hours after it was delivered. The company said it was investigating the incident.

The owner of the phone involved in Wednesday’s incident told investigators it was a replacement Galaxy Note 7, said Captain Kevin Fletcher of the Louisville Metro Arson Squad.

Arson squad
“Due to the damage to the phone itself, we have not been able to physically confirm that yet,” Fletcher said during an interview. “We’re in the process of trying to attempt that.”

Samsung and US officials announced the recall after 92 reports of batteries overheating in the US, with 26 cases involving burns.

Samsung, FAA and Consumer Product Safety Commission representatives were in Louisville and working with arson investigators, Fletcher said. The phone remains in the possession of the arson squad, which is trying to schedule laboratory tests on the phone. It hasn’t been determined where or when those tests will occur, Fletcher said.

There was “extensive heat damage” to the phone and the plane’s carpet, he said.

Brian Green, the phone’s owner, told WAVE television news in Louisville that he got a replacement phone at a retail store after receiving an e-mail about the recall. “It was a good phone, by all indications, from all the information Samsung provided,” Green said. “But it just had its issues.”

Billowing smoke
On the plane, he turned the phone off and put it in his pocket. The device made a popping sound and sent “smoke just billowing out of my clothes,” Green said. He dropped it to avoid getting hurt.

Samsung said in a statement Wednesday that it couldn’t confirm that the incident involved the new phone but would have more information after examining the device. The company didn’t offer an update Thursday and a spokeswoman had no immediate reply to a request for comment on the possibility of another recall.

The CPSC and Samsung have a range of options, from a broad new recall if systemic flaws are discovered in the replacement devices to no action if they don’t find any broader safety issues.

While the safety agency has legal authority to order recalls, that requires court action and could take months. Instead, it almost always operates in collaboration with companies, as it did with Samsung.

Apple competitor
Samsung had raced to complete the introduction of the Galaxy Note 7 before Apple could unveil its new iPhone 7. The Galaxy Note 7 features a larger battery that can store more power than its predecessor.

A battery supplier made the power packs slightly too large for the phone’s compartment, the consumer safety commission said when announcing the recall September 15. As a result, the battery components were sometimes pinched, which could cause a short circuit, according to the agency.

Rechargeable lithium-ion cells like those in the Samsung phones are made with highly flammable chemicals. When they fail, they can generate intense heat or sparks that can ignite those chemicals.

The United Nations International Civil Aviation Organization earlier this year banned bulk shipments of lithium-ion cells from passenger flights after tests showed that they could violently explode even after being doused with fire extinguishers.

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