Samsung Said to Halt Note 7 Output

Samsung Said to Halt Note 7 Output

Samsung halted production of its Note 7 smartphones after customers reported problems with new devices, the latest blow in a six-week crisis over exploding phone batteries, according to Bloomberg.

Samsung temporarily suspended production of its most expensive phone, a person with direct knowledge of the matter said Monday, asking not to be identified because the decision isn’t public. The move came after wireless carriers including T-Mobile US and Australia’s Telstra stopped selling Note 7 following reports of problems with devices thought to be safe.

“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.“

The crisis has strained Samsung’s leadership just as it’s in the midst of a challenging transition. Lee Kun-Hee, chairman of both the electronics unit and the broader Samsung Group, suffered a heart attack in 2014 and hasn’t been back to the business since. His son, Jay Y. Lee, is heir apparent, but hasn’t taken his father’s title because Korean culture precludes such a move while the elder Lee is alive. The phone unit is run by D.J. Koh, who took over last December.

Along with T-Mobile, AT&T halted sales of the device in the U.S. over safety concerns. “Based on recent reports, we’re no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents,“  AT&T spokesman Fletcher Cook said in an e-mailed statement Sunday.

"It’s meaningless to continue producing the Note 7," Greg Roh, analyst at HMC Investment Securities Co, said by phone. "It may not be able to sell the new Note 7 anyhow if the carriers are banning them for sale.