Samsung urges 1 million Note 7 holders to stop using them

Sept. 2, 2016, file photo, a woman walks by an advertisement of the Samsung Electronics Galaxy Note 7 smartphone at the company’s showroom in Seoul, South Korea. The Federal Aviation Administration said Thursday night, Sept. 8, 2016, that because of recent fire reports involving the Galaxy Note 7 smartphone, passengers shouldn’t use or charge one or stow one in checked baggage. The three biggest U.S. airlines: American, Delta and United, said Friday that they were studying the FAA warning but it was unclear how they would make sure that passengers keep the Samsung devices powered off. (AP Photo/Ahn Young-joon, File)

Samsung Electronics has advised an estimated 1 million Galaxy Note 7 users to stop using the device, citing a recent emergency order from the U.S. Department of Transportation (DOT) that banned all Note 7 smartphones on airline flights there.

“We encourage any Note 7 users to be sure to get a refund or change the device with other models before any flight,” the company said in a statement, Saturday. “We apologize for causing inconvenience following orders from the DOT and Korea’s Ministry of Land, Infrastructure and Transport.”

The company said it had been running Samsung Electronics’ rental phone booths at Korea’s major airports in Incheon, Gimpo and Gimhae for people who had yet to return Note 7 devices. According to data from predictive app intelligence company Apteligent, more than 1 million Note 7 devices were still being used as of Wednesday.

Since Samsung Electronics announced on October 11 that it would stop producing the device, the company has required Note 7 users to turn off and return their devices as soon as possible amid mounting concerns that original and replacement devices are reported to be catching fire.

The world’s largest smartphone vendor by shipment unveiled the 5.7-inch high-end smartphone on mid-August. But its advanced functions ― including iris scanner or water proofing ― started to lose their luster amid continued reports that the device overheats and catches fire while charging.

The mounting controversy led Samsung to recall about 2.5 million Note 7s about two weeks after the model’s launch. At that time, Samsung cited a battery fault as the core reason behind the defect.

The company then replaced the original devices with new ones with safe batteries. But continuing reports that replacement Note 7s were also catching fire overshadowed efforts to win back customer trust.

Samsung Electronics and the U.S. Consumer Product Safety Commission (CPSC) are investigating the exact causes of the fires, but specific reasons have yet to be confirmed.

In a recent interview with The Korea Times, the CPSC said the commission did not have a timeframe to complete the investigation but added that CPSC staff were “working expeditiously.”

Last week, Samsung revised down its third-quarter preliminary operating profit to 5.2 trillion won ($4.58 billion), reflecting losses from the recall and the impact of its decision to stop producing and selling the device for good.

The company also added that it would suffer from an additional loss of about 3.5 trillion won in the fourth quarter and the first quarter of next year, due to the production termination.

With the two recalls expected to cost the tech giant about 2.6 trillion won, the overall losses would be somewhere around 7 trillion won, according to observers.

The predecessor of the Note 7, the Galaxy Note 5, sold about 10 million units around the world and the Note 7 was originally predicted to sell much more thanks to its fancy functionalities. Indeed, the device met such expectations in preorders and pre-recall sales.

Because of the unprecedented decision to halt global sales of the Note 7, Samsung shares plunged 8.04 percent on Tuesday, the steepest drop in nearly eight years since October 2008.

The stock closed at 1,577,000 won last week, down 7.56 percent from a record high of 1,706,000 won just a week earlier. (Lee Min-hyung, The Korea Times)