Samsung has announced it is permanently halting production of the Galaxy Note 7 smartphone, a gadget that was intended to propel a comeback but instead has engulfed the South Korea company in a major corporate crisis.
Samsung had a been on a roll earlier this year with the introduction of the Galaxy 7, which saw its mobile sales pickup after a couple of rough years. The Galaxy Note 7, with its bigger design and stylus, also came just as rival Apple was seeing a first-time-ever slump in iPhone sales.
Any sense of victory, however, quickly turned sour amid reports of exploding Galaxy Note 7s. The company initiated a clumsy recall process that left consumers confused and angry. It seemed to finally stop the bleeding with the delivery or replacement units.
However, in recent weeks, new reports emerged that at least three replacement units had exploded.
Yesterday, Samsung announced it was “temporarily adjusting” production the phone following reports that several replacement devices had exploded.
But today, it confirmed it was shutting down production and telling all partners to stop selling whatever inventory is left, according to statement given to Bloomberg.
By Tuesday afternoon European time, it appeared Samsung had removed all references to the Galaxy Note 7 from its website. (A cached version of the site is here.)
News of the decision hit the company hard, as investors sent its stock down 7.5 percent.
It remains to be seen how much long-term damage this will cause to Samsung, which evidently has not been able to pinpoint and fix the problems causing the explosion. And it’s also unclear how much Apple, which just launched the latest version of its iPhones last month, will benefit.
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