Samsung has recalled its new Galaxy Note 7 smartphones in 10 countries after reports that some batteries exploded or caught fire.
Koh Dong-jin, head of the South Korean company’s smartphone business, expressed regret over the recall of an estimated 1m devices, which will affect markets including South Korea, the United States and Australia.
The phone was due to launch in the UK on Friday but Samsung said sales had been stopped because of a “battery cell issue”.
Reports began circulating on social media during the week that the phone was catching fire when charging. Samsung would not confirm if the problems happened while the phones were charging or during normal use.
The recall comes just over two weeks after the company launched its latest premium phone, which features an outsized screen and high-resolution camera.
Koh, who declined to comment on how many phones needed to be replaced, said Samsung had sold 2.5m of the 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 1m 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,” Koh said.
Models in China feature a different battery and are not being recalled by Samsung, the world’s biggest smartphone vendor.
The scale of the recall is unprecedented for Samsung, which prides itself on its manufacturing prowess. While recalls in the smartphone industry do happen, including for rival Apple, the nature of the problem for the Galaxy Note 7 is a serious blow to Samsung’s reputation, analysts said.
The company should act quickly to minimise damage to its smartphone recovery, after a string of product successes had reversed a fall in market share, they added.
The phone first launched in 10 markets in North America, Asia and the Middle East. Further roll-outs have occurred since in markets like China, where sales started just this week. Its wider availability, including this weekend in the UK, is now on hold.
While there are occasional reports of phones catching fire or otherwise burning users, documented cases that lead to widespread product recalls remain relatively rare. Samsung said it was aware of 35 reports of affected Note 7 batteries.
In 2007, the largest battery recall in consumer electronics history took place when Nokia, then the world’s top mobile handset maker, offered to replace 46m phone batteries produced for it by Japanese maker Matsushita Battery.
Germany’s biggest operator, Deutsche Telekom, said it had stopped delivering orders for the Galaxy Note 7, while French operator Orange said on its website that it had stopped pre-sales of the phone and postponed its planned sales launch –scheduled for Friday.
In Britain, mobile carriers EE and Vodafone continue to accept pre-orders for the Note 7 on their sites.
US operators have been taking pre-orders since early August. All major wireless carriers, including top US wireless provider Verizon Communications, said they had stopped selling the Galaxy Note 7.
Target, a major U.S. retailer, also said it had halted sales of the Note 7.
Verizon said that if a customer wants to return or exchange the Galaxy Note 7, it would waive through September 30 the restocking fee it charges customers. T-Mobile US, majority owned by Deutsche Telekom, said in a statement it would also waive restocking and shipping charges to customers who want to return the recalled phone.
Samsung has said it aimed for the Note 7 to maintain strong sales momentum in the second half of the year against stiffening competition from the likes of Apple, which is widely expected to release its latest iPhone next week.
“I am concerned more about a potential reduction in sales than recall costs,” said analyst Jay Yoo at Korea Investment & Securities. “The recall is likely to be a blow to earnings.”
Samsung said new sales of the Note 7 in affected markets would resume after it deals with replacements, a process it expects will begin in about two weeks. The firm would extend refund periods for affected customers and offer exchanges for other Samsung phones, Koh said.
Investors sold Samsung shares after the delay announcement on Thursday, stripping about $7bn from the firm’s market value, which remains just off recent record highs.