Samsung warns of more Galaxy Note delays amid battery explosion claims (updated)

LG Uplus

01/09/2016 01:03

* Delay comes amid reports of new phone's battery exploding 
    * Note 7 shipments to S.Korean carriers have been halted 
-Samsung 
    * Firm counting on the new premium device for H2 sales 
momentum 
    * Supply issues should be resolved in near term -analyst 
 
 (Changes date, updates with comments from Samsung and analyst) 
    By Se Young Lee 
    SEOUL, Sept 1 (Reuters) - Tech giant Samsung Electronics Co 
Ltd  005930.KS  said on Wednesday shipments of the Galaxy Note 7 
smartphone are being delayed as the firm conducts additional 
quality control testing for the premium device.  
    The firm also said Galaxy Note 7 shipments to South Korea's 
top three carriers - SK Telecom Co Ltd  017670.KS , KT Corp 
 030200.KS  and LG Uplus Corp  032640.KS  - had been halted. 
    "Shipments of the Galaxy Note 7 are being delayed due to 
additional tests being conducted for product quality," Samsung 
said in a statement to Reuters.       
    The firm did not elaborate on what potential problems it was 
testing for or whether shipments to other countries were being 
affected. South Korean media reports have said some users have 
claimed that the battery exploded. 
    Quality control problems, if confirmed, could deal a major 
blow to the world's top smartphone maker, which was counting on 
the Galaxy Note 7 to help maintain sales momentum in the second 
half when competition is expected to intensify. 
    The phone, which launched in South Korea and other markets 
on Aug. 19, retails at 988,900 won ($887.23) in South Korea. 
    Production problems for the curved displays for the Galaxy 
S6 edge phone resulted in disappointing sales last year, and 
Samsung risks a repeat this year if it cannot address the Galaxy 
Note 7 supply problems quickly. Rival Apple Inc  AAPL.O  is 
expected to unveil its new phones next week.           
    Hyundai Securities said in a report released on Thursday 
that the Galaxy Note 7's problems appeared to be related to 
modules or parts, and that such "malfunctions" should be  
resolved quickly.   
    "Such problems can be addressed by replacing parts and 
modules and changing the design of circuits, so supply problems 
for the Galaxy Note 7 should ease within a matter of few weeks," 
the brokerage said, retaining its third-quarter operating profit 
forecast of 8.5 trillion won.      
    It was not immediately clear when Galaxy Note 7 shipments to 
South Korean carriers would resume. 
    Samsung has said demand for the new phone is far exceeding 
demand, creating a shortage and forcing it to push back the 
launch in some markets. The firm has said it is utilising all 
possible means to boost production.  urn:newsml:reuters.com:*:nL3N1B455Y     
    Samsung's other premium smartphone models that launched in 
March, the Galaxy S7 and S7 edge, have been huge hits with 
customers and lifted earnings in the first half.  urn:newsml:reuters.com:*:nL4N1AD62A 
 
($1 = 1,114.5900 won) 
 
 (Reporting by Se Young Lee; Editing by Muralikumar Anantharaman 
and Stephen Coates) 
 ((vincentsy.lee@thomsonreuters.com; +822 3704 5646; Reuters 
Messaging: vincentsy.lee.thomsonreuters.com@reuters.net; follow 
me on Twitter @Rover829)) 
 
Keywords: SAMSUNG ELEC SMARTPHONES/