Samsung scraps Note 7, so what next for consumers?

Steve Noviello reports.

Samsung Electronics said Tuesday that it is stopping production of Galaxy Note 7 smartphones permanently, a day after stopping global sales of the ill-fated devices amid reports that batteries were catching fire.

The South Korean company said in a regulatory filing that it decided to stop manufacturing Note 7s for the sake of consumer safety.

Samsung is struggling to regain consumer trust after a first round of recalls that prompted criticism both for the faulty devices and for the company's handling of the problem.

After the earlier recall, the company said it had identified a manufacturing defect in the batteries of its top-of-the-line smartphone.

It started shipping new Note 7 phones that were supposed to be safer. But reports that even the replacements were catching fire led Samsung to announce it was stopping sales of the devices.

Authorities in the U.S. and South Korea are still investigating why even the replacement Note 7 phones that Samsung equipped with a safer battery are catching fire. An official at the South Korean safety agency said the replacement phones may have a defect that is different from the problem with the original Note 7s.

Samsung's shares plunged 8 percent Tuesday in Seoul, their biggest fall since the 2008 financial crisis. And that was before it announced it was discontinuing the Note 7.

Also Tuesday, China's product safety regulator said Samsung will recall all Galaxy Note 7 smartphones sold in mainland China, amounting to around 191,000 units.

The General Administration of Quality Supervision, Inspection and Quarantine said it was investigating for defects in the devices

Samsung will either provide a full refund at the original price or replace Note 7 units with any other model of Samsung phone, and give refunds of the difference in prices, along with a 300 yuan ($45) voucher.

Samsung's brand has already been battered by complaints it is doing too little to reassure Chinese owners their handsets are safe.

Initially, Samsung had said in September that the Note 7s sold in China would not be affected because their batteries came from a different supplier, ATL. Samsung recalled 1,858 Note 7 phones in China in September, saying they were distributed for testing before sales to the public began on Sept. 1.


So what's a Note 7 owner to do? Here are some answers to common questions:

I have one of the replacement phones. Do I really need to stop using it?

Absolutely. The multiple investigations into replacement units catching fire and the fact Samsung has pulled the plug on the model should tell you something.

In addition, South Korean safety authorities said Tuesday that they may have found a new defect that may not be related to the batteries.

If you insist on using a Note 7 until obtaining a replacement, don't plug it in at night at your bedside, and don't give it to your kids. Use it at your own risk.

How bad have the fires been?

Social media are filled with pictures of smoldering phones. While dramatic, these occurrences are far from common. But you don't want to become the next headline.

Michael Klering of Nicholasville, Kentucky, says his replacement Note 7 caught fire while he was sleeping last week. The fire scorched a nightstand and filled his house with smoke that he says has caused his family to suffer breathing problems.

And when U.S. regulators announced their recall of the original Note 7s last month, they cited 92 reports of the batteries overheating in the U.S., including 26 reports of burns and 55 of property damage. The property damage included fires in cars and a garage.

Did I just waste nearly a thousand dollars on the Note 7?

Samsung has been slow to release specific information on the replacement phones. Its initial recall offered owners a refund, a replacement Note 7 or another Samsung phone such as the Galaxy S7 with a refund of any difference in price.

While the replacement phone isn't an option anymore, the offer of a refund or another model of Samsung phone still stands. All major U.S. carriers are also letting customers switch to another manufacturer's phone.

Customers who exchange a Note 7 for another Samsung product also get a $25 in the form of a gift card, in-store credit or bill credit from select carriers or retailers.

What about accessories?

It depends on the carrier. T-Mobile and AT&T, for instance, are giving full refunds on accessories.

Some Samsung gadgets, such as its Gear Fit2 fitness tracker, will work with other Android phones. The Gear VR virtual reality headset requires a recent Samsung phone, though.

I'd like to stick with Samsung. What's available?

The Galaxy S7, which came out in March, doesn't offer the same huge screen as the Note 7, but it has many of the same features. Notable exceptions are the Note 7's iris scanner and pen.

Samsung's Galaxy S8 is expected in February or March, making the S7 feel old already. Even older is last year's Note 5 (there was no Note 6).

It's unlikely that Samsung will try to push out the S8 earlier to fill the gap, as the company is dependent on parts that might not be ready until next year.

Could other phones catch fire?

Given consumer demand for batteries that are more powerful, last longer and charge faster, it's a little surprising that Note 7 is the only phone catching fire these days.

Not that long ago, some laptop batteries were going up in flames too.

The Note 7 is still being dissected by tech experts for Samsung and the government. They may find that the problem isn't with the battery at all.

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