A Galaxy Note 7 user consults with a Samsung engineer about his smartphone at a service center in Seoul. [Yonhap Photo]
South Korean tech giant Samsung Electronics suffered a major setback in its share value Monday after its reputation as a reliable smartphone maker was hurt by the explosion of Galaxy Note 7 batteries and a global recall.
The tech giant announced a global recall on September 2, only two weeks after its flagship smartphone was unveiled. Its share price has fallen 13.16 percent since August 23 when the first explosion was reported at home. On Monday, Samsung shares dropped 6.98 percent to 1.46 million won (1,311 US dollars).
Through last week, Samsung's rare recall has disappointed investors, dragging down its share price by 5.4 percent for five days. The fall was notable after the US Federal Aviation Administration and airline companies banned passengers from charging Samsung's Note 7s aboard planes. On Monday, Samsung shares fell nearly seven percent.
Samsung has advised against the use of Note 7s in South Korea and the United States, asking users to exchange them quickly. Transport authorities and airlines in many other countries have issued bans or guidelines to stop passengers from turning on or charging the device on flights.
Samsung may remotely deactivate all Note 7s after a certain deadline probably on September 30, according to an online media report, as safety concerns caused by battery explosions prompted a ban on the smartphone in a number of countries.
Samsung now faces a recall of more than 2.5 million Note 7s globally, and nobody is sure when the replacement program will finally come to its end.
Yonhap News reported, citing industry sources, that China's ATL is set to become the sole battery supplier for Samsung for the time being since the South Korean company stopped receiving batteries from its subsidiary, Samsung SDI, which used to supply 70 percent of batteries.
ATL supplies batteries for Apple's iPhone series, which means Samsung could face supply restraint if demand soars for the latest iPhone 7 and iPhone 7 Plus, Yonhap said.
Aju News Park Sae-jin = swatchsjp@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
