Samsung Electronics Co Ltd needs to quickly find the cause of the fires that led to it pulling its Galaxy Note 7 smartphones and get a new model to market, investors said on Wednesday, as shares in the company slipped to a one-month low.
The world’s top smartphone maker on Tuesday scrapped the $882 flagship smartphone in what could be one of the costliest product safety failures in tech history. Samsung announced the recall of 2.5 million Note 7s in early September following reports of the phones catching fire. The firm appeared to have the situation under control as it issued replacement devices with different batteries, until the new phones also began to smoke and combust.
Investors and analysts agreed that the damage to Samsung’s brand and future earnings would deepen the longer the market was left in the dark about the origin of the fault, with some already predicting lost revenue in the region of $17 billion. Experts are baffled by what could be causing the overheating in the replacement phones, if not the batteries, and Samsung has not commented.
Samsung shares were down 1.6 percent as of 0436 GMT after touching a one-month low of 1.494 million won ($1,340), reflecting concerns about fourth-quarter earnings as well as the potential long-term impact on its smartphone business.The stock is down 11 percent so far this week, on track for worst weekly percentage fall since December 2008.