PRODUCT RECALL
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Samsung Electronics

Samsung recalls 191,000 Note 7 smart phones in China, puts Hong Kong users on hold

Company will replace Galaxy Note 7 with other Samsung phones in China, reimburse any price difference and present buyers with a 300 yuan voucher. Hong Kong customers are on hold for an exchange-and-refund plan.

PUBLISHED : Tuesday, 11 October, 2016, 6:45pm
UPDATED : Thursday, 13 October, 2016, 11:18am

Samsung Electronics Co. is recalling 191,000 of its Galaxy Note 7 smartphones in China, after reported cases of its overheating battery forced the world’s largest maker of Android phones to stop producing the model and warn customers to switch off their devices.

The company will recall 190,984 phones in China, including 1,858 which were already taken back in a September 14 recall, according to a Tuesday statement by the General Administration of Quality Supervision, Inspection & Quarantine.

As many as 20 cases of Galaxy Note 7 batteries overheating or catching fire have been reported in China, the inspection administration said. The company will replace the faulty model with other Samsung brand phones, reimburse buyers with any price difference and present them with a 300 yuan (US$45) gift voucher each, according to the statement.

The recall in the world’s largest phone market, representing about 8 per cent of Galaxy Note 7 phones sold globally, is part of Samsung’s worldwide alert for customers to stop using the device immediately. A similar notice applies to customers in Hong Kong and Macau, but customers are still awaiting details of Samsung’s exchange-and-refund plan.

The Hong Kong Consumer Council said it had received about 160 complaints about the phone model to date. Reports of the model’s battery spontaneously catching fire, or exploding, started surfacing about two months ago.

Parallel traders of electronic products in Sin Tat Plaza said the decision to halt sales isn’t unexpected, and consumers have already lost interest in Samsung’s device.

The owner of Like, a store at the Sin Tat Plaza in Mong Kok, said he was no longer carrying the Galaxy Note 7. Price of the new device is about HK$5,500 (US$709), with no buyers in sight, said the owner, who would identify himself only as Peter.

For shops carrying the inventory, losses may run to as much as HK$1,000 per phone even if the unsold faulty phones are replaced and refunded, he said.

Large retailers including Fortress and Broadway in Mong Kok have already removed posters of the Galaxy Note 7 from their stores and stopped selling the model.

Cellular phone network operator PCCW has also stopped selling the model, and will refund or exchange the phone for customers upon request.

The crisis couldn’t come at a worse time for Seoul-based company, which is facing competition by Apple’s new iPhone 7 model on one end, and China-made phones running on the Android operating system on the other. A global recall could cost Samsung US$630 million in foregone sales, analysts said.