Samsung has had £11bn wiped off its shares after the world’s biggest mobile phone maker warned customers not to use its Note 7 model because of the risk of it catching fire.
The South Korean company suspended sales of the phone, which it launched in late August to rave reviews, on 2 September. It said there were 35 cases of it catching alight or exploding out of 2.5m units sold, and blamed a battery cell problem.
On Friday, Samsung Electronics America asked Note 7 owners to shut off their phones and exchange them for another device. It did so after US aviation safety officials warned airline passengers not to turn on or charge the phone during flights or put them in checked bags.
“Some said initially the Galaxy Note 7 could be the best smartphone ever, but now it’s possible the phone will go down as the worst ever,” Lee Seung-woo, an analyst at South Korean bank IBK Securities, told Reuters.
Samsung shares fell almost 7% to won 1.465m, knocking about $14bn (£11bn) off the company’s market value, as traders worried the recall could wreck sales of the Note 7 and cause lasting damage to Samsung’s reputation.
Samsung released the Note 7, which costs almost £680, shortly before Apple unveiled its new iPhone.
