The latest announcement from Samsung has urged users of it’s Galaxy 7 note Smartphone not to turn on the handset. This follows increased fears that units are a potential fire hazard. Several units have now been reported by consumers to have burst into flames.
Shares in the electronics giant and technology company plunged overnight in response to this latest announcement.
At the close of trading Samsung shares were down over 1.52 per cent. This is in spite of the fact that the company reported stronger than expected earnings for the last quarter. The news saw over 11 billion dollars wiped of the market capitalization of the South Korean company.
A re-launch of the £740 SmartPhone has now been postponed indefinitely. A global roll out had already been delayed due to concerns that handsets were overhearing.
Samsung announced that over 2.5 million handsets were being withdrawn worldwide in response to these latest findings.
A spokesperson from Samsung said it was confident that it had overcome the problem. Nevertheless industry experts acknowledge that this will bring unwelcome attention to the electronics brand. There is also speculation that the company may permanently shelve the production of this model.
Officials from authorities in both the US and South Korea have reiterated the companies advice to turn off the phones. This follows several consumer reports of units emitting smoke and catching fire. Of note was a Galaxy 7 Note which was reported to have burst into flames on a South West Airlines flight.
The multinational South Korean electronics company has recently been seen to start to turn around. It’s fortunes in the Smart Phone market. It has been increasingly forced to play ‘catch up’ to many rivals. This latest announcement therefore comes at a bad time for the company. This latest news will do nothing to enhance its reputation with a fickle consumer base.
This latest announcement saw stock in competitor Apple gain and set a new high for 2016. Shares in Apple traded up over 1.75 per cent at the close. Despite the lukewarm reception for the latest incarnation of its iconic iPhone 7 per orders have strongly underpinned earnings forecasts for the stock.
Binary Options traders may want to take advantage of this current momentum on the expectation of further gains. A call contract can be purchased that pays out on a higher outcome. Apple stock closed the day at $116.06.