Following a number of reports about replacement Samsung Galaxy Note7s suffering battery fires, the South Korean company has decided to permanently cease production of the smartphone. Given its size, although Samsung will be able to absorb the consequences of the the decision, there will still be a considerable financial impact on the company in the short term.
As could have been predicted, the markets reacted both quickly and decisively to Samsung’s decision. On Tuesday afternoon, almost €12.6 billion was wiped off the value of the company.
In a brief statement announcing a halt to retail activity, Samsung emphasised that safety concerns for its customer were behind the move.
“Because consumers’ safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.”
In addition to concerns about the risks posed by lithium-ion battery fires, Samsung is likely to have been worried about potential long-term damage to its reputation, so chose to act decisively.
[via Deutsche Welle]