Exploding battery: South Korean consumers snub Samsung’s phone swap deal

Samsung’s offer to exchange its Note 7 model for another until it solves a hazardous battery issue has not been accepted by many owners in Seoul

PUBLISHED : Monday, 19 September, 2016, 9:11pm
UPDATED : Monday, 19 September, 2016, 10:04pm

Samsung rolled out replacements for Galaxy Note 7s plagued by exploding batteries in South Korea on Monday, but only a handful of customers appeared to have taken the opportunity to swap their handsets.

The world’s largest maker of mobile phones recalled 2.5-million units of its top-of-the-range model more than two weeks ago, after batteries began catching fire while charging.

But users snubbed the South Korean electronics giant’s offer of a temporary replacement until new Note 7s became available, and there seemed to be little urgency among consumers for the permanent fix offered on Monday.

The success of the recall is seen as crucial to Samsung retaining brand loyalty and preventing customers defecting to arch-rival Apple’s new iPhone 7 or cheaper Chinese-made models.

The handset replacement comes amid reports that at least two Galaxy Note 7 smartphones caught fire in China, where the company previously said all phones for sale were safe and didn’t need to be included in a global recall.

Late on Sunday, Chinese online financial magazine Caixin cited an internet user’s report that their Note 7 phone, bought from JD.com, had caught fire in what appeared to be the first report in China of a fire involving the handset.

Amperex Technology Limited (ATL) said it conducted a joint investigation with Samsung on the phone in question and determined the incident was not directly linked to a battery made by the China-based firm.

“According to the burn marks on the sample, we surmise that the source of the heating comes from outside the battery, and it’s very likely that there was an external factor causing the heating problem,” the battery maker said in a statement.

Galaxy Note 7 owners ‘strongly advised’ not to turn them on or charge them on flights: US air safety chiefs

Samsung last week announced a recall of 1,858 Note 7 phones in China but those devices were products distributed before the official September 1 launch. The company said the phones sold through the official launch used batteries different from those in reported fires.

The batteries from the phones with confirmed problems are made by Samsung SDI Co, a person familiar with the matter has said.

A Samsung spokeswoman confirmed the firm had started to offer the replacement handsets in South Korea and several European nations including Britain on Monday – and would follow suit in the US on Wednesday and expand to other markets by next week.

The company began offering replacements for users in Canada and Singapore last week and is set to start soon in other nations including Mexico, Taiwan, New Zealand the United Arab Emirates.

But with only a trickle of customers visiting stores in Seoul on Monday for their replacements, the fate of the much-hyped handset remained unclear, although consumers in the South Korean capital were

sympathetic.

I liked that the company acted very quickly and decisively about the whole thing ... so I decided to trust it once more
Kim Jung-Nam

Here’s what Samsung can do to recover from Note 7 recall horror

“I felt terrible when I heard about the battery explosion only days after I had bought my Note 7,” Kim Jung-Nam said after receiving the replacement.

“But I liked that the company acted very quickly and decisively about the whole thing ... so I decided to trust it once more,” he said.

The recall – the first involving Samsung’s flagship smartphone – dealt a major blow to the firm’s reputation and raised alarm among airline, with several banning passengers from using the device on board.

South Korean users have time until March 2017 to hand in their phones for a replacement but Samsung is hoping a software update that will limit battery recharges to 60 per cent of capacity will jolt consumers into returning their handsets.

The recall crisis erupted as Samsung finds itself squeezed by competition from Apple in the high-end market and Chinese rivals in the low-and mid-end segment.

Analyst Lee Seung-Woo of Seoul-based IBK Investment & Securities said the recall may eventually cost Samsung up to 3.3 trillion won (US$2.9 billion), potentially denting future smartphone sales and forcing the company to spend more on marketing.

Additional reporting by Reuters and Bloomberg