Seoul - Tech giant Samsung Electronics said on Friday it will halt the sales of its Galaxy Note 7 smartphones and will prepare replacement devices for phones already sold after finding problems with the battery cell used.
Samsung, in a statement, said it will take about two weeks to prepare replacement devices for the phones already sold.
It was not clear when new sales of the devices would begin.
Earlier in the week, reports emerged that some of the premium phones are catching fire due to battery problems.
The high-end gadget has been the subject of online complaints from users claiming their phones had caught fire while charging.
While analysts expect the Note 7 problems to be resolved quickly, ongoing major problems could derail Samsung's mobile recovery after a string of product successes had reversed the smartphone leader's declining market share.
The South Korean firm had pinned its hopes on the Note 7 to maintain strong sales momentum in the second half against stiffening competition from the likes of Apple, which is expected to release its latest iPhone next week.
“They need to nip it in the bud right now. The last thing they want is for memes to be spreading on the internet associating the Samsung name with an exploding battery or injury,” IDC analyst Bryan Ma said.
On Wednesday, Samsung said it had halted supply of the new phone to the top three South Korean carriers and that shipments were being delayed as it conducted additional quality testing.
Investors stripped about $7 billion off Samsung Electronics' market value in response to the shipment delays on Thursday, but sentiment appeared to have recovered in Friday trading. The shares rose 0.6 percent compared with a 0.3 percent gain for the broader market.
REUTERS