Faulty batteries blow for Samsung

LOSING POWER: Some Samsung products. Picture: Supplied.
LOSING POWER: Some Samsung products.
Picture: Supplied.

The recovery in Samsung Electronics ’ cellphone business suffered a blow yesterday as reports of exploding batteries forced it to delay shipments of Galaxy Note 7 smartphones‚ and knocked $7-billion (R102.7-billion) off its market value.

Investors drove the stock to two-week lows after the global smartphone leader said the shipments had been delayed for quality control testing‚ and that shipments to South Korea’s top three mobile carriers had been halted.

Faults with the new premium flagship device could deal a major blow to the South Korean giant‚ which was counting on the Galaxy Note 7 to maintain its strong mobile earnings momentum against Apple’s new iPhones to be unveiled next week.

Samsung did not comment on what problem it was trying to addressor whether markets other than South Korea were affected.

Sister company Samsung SDI Co said that while it was a supplier of Galaxy Note 7 batteries‚ it had received no information to suggest the batteries were faulty. Several people posted images and videos of charred Galaxy Note 7s online.

Samsung’s shares fell 2%‚ and Samsung SDI tumbled 6.1%.Samsung’s cellphone profit was on track to post annual growth for the first time in three years‚ thanks to robust sales of the Galaxy S7 and S7 edge devices  launched in March. – Reuters

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