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Business

Don't sell or use Galaxy Note 7: Samsung

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Business

Don't sell or use Galaxy Note 7: Samsung

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COMING UP:Don't sell or use Galaxy Note 7: Samsung

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00:00:02
>> Samsung says for your safety switch it off and keep it off. The electronics giant on Tuesday pulling the Galaxy Note 7 off shelves for the second time in two months and telling customers to stop using the phone. The Note 7 was already in the middle of a huge recall when reports emerged that the new devices were also catching fire.
00:00:22
Reuters Vincent Lee explains how big a disaster this is for the world's biggest smartphone maker.>> The financial cost right now being estimated are about, over 1 trillion won, at least, so somewhere in the billion dollar region for just the third quarter. And now some analysts are saying the financial costs could be even larger than that during the fourth quarter.
00:00:42
>> The news has battered Samsung's stock prices, shares falling 5% after the market's opening Tuesday. U.S. and South Korean aviation officials are urging passengers not to use the phones or their replacements on planes. While some airlines have banned the device all together after a smoking Note 7 forced the evacuation of a U.S. flight last week.
00:01:02
Samsung has recalled 2.5 million of the phones and says it's working with regulators to figure out what the battery problem is, but some warn that the brand won't be so easy to fix.>> There is also major reputation damage because these are phones that Samsung has basically put back on the market saying it's safe.
00:01:20
And that could have long-term impact in terms of Samsung's reputation, in terms of their sales for future devices, etc., and so on.>> Analysts say that by the time the Note 7 is fixed, Samsung will already be preparing to launch the Galaxy S8, meaning that it's looking more and more likely that the company will be cutting its losses and scrapping the phone all together.
00:01:39
For now, it's offering to exchange all Note 7s for other products or a refund.