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Business

Samsung recalls Galaxy Note 7 worldwide

Opening sequence

Opening sequence

Business

Samsung recalls Galaxy Note 7 worldwide

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COMING UP:Samsung recalls Galaxy Note 7 worldwide

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Transcript

00:00:00
>> It's the new Samsung didn't want to have to put out. The company announcing Friday that it's recalling the Galaxy Note 7 worldwide after reports about the phone's battery catching fire. It's a huge setback for a model that was only launched a month ago. Reuters Vincent Lee says it's also bad news for a company that was supposed to be on the rebound.
00:00:20
>> The reason why it's important is the Note series doesn't do as much in terms of sales volume as that series, but it is a high margin product, so the better it sells, the better profits the company generates. The problem now is they were already having supply shortage issues before cuz demand was this much greater than that they anticipated, but now there's a quality control issue.
00:00:41
So if they can't fix this right away, and it takes several months or even quarters, then this is a serious problem for them. And there could a lot of earnings pressure heading into the second half.>> Samsung says it should take around two weeks to replace phones that have already been sold.
00:00:54
But there's no telling when new safer models will arrive back in stores. The companies is halting Note 7 sales in all countries except China where it uses a different type of battery. Samsung isn't saying how much it's going to have to fork out having to replace the phone tablet, but admits it will be a lot.