Samsung shares plummeted on Tuesday after it announced it would no longer be producing its flagship phone, the Note 7.
The electronics firm have ceased production of its high-end Note 7 model after even reports that even those models it had deemed safe began catching fire. The firm had already reduced Galaxy Note 7 production after complaints of exploding batteries in September sparked safety concerns.
Samsung recalled devices with battery problems, replacing them with different devices. However, these were later found to have issues after a domestic flight in the US was evacuated after a Samsung phone started smoking.
On Tuesday Samsung announced its decision to halt production of the Note 7 phone altogether, and owners are expected to be able to swap it in store for another Samsung device.
Its shares fell dramatically on Tuesday as investors worried over the long-term impact of the problem. Greg Roh, from HMC Investment Securities, told the BBC Samsung could suffer “a considerable loss of consumer faith.”
“The reason consumers prefer brands like Samsung and Apple is because of product reliability. So in this case, brand damage is inevitable and it will be costly for Samsung to turn that around again.”
Samsung (KRX:005930) shares are currently down 7.5 percent at 1,554,000 (1303GMT).
11/10/2016
