The South Korean company said in a regulatory filing Tuesday that it had made a final decision to stop production for the sake of consumer safety.
"For the benefit of consumers' safety, we stopped sales and exchanges of the Galaxy Note 7 and have consequently decided to stop production," a Samsung spokesperson told Business Insider in a statement.
Samsung is struggling to regain consumer trust after a first round of recalls. The company told customers around the world on September 2 that it was starting a global recall as a precaution after several phones caught fire after charging.
The company shipped out new phones it said were not affected by the battery issue. The saga would have been a minor issue for Samsung if it had ended there, and the Galaxy Note 7 could have lived on.
But Samsung stopped selling the device after it found that even the supposedly safer replacements it was providing for recalled Note 7 phones were catching fire. Now Samsung has to go through a second round of recalls on the same model of phone. The Note 7 brand has been damaged by this, and analysts began to suggest on Monday that Samsung should cut its losses and move on.
South Korean media reported Monday that Samsung's factories stopped making the fire-prone phones, but Samsung insisted it was making production adjustments to improve inspections and quality control. Now it says it has officially killed off the Note 7.
If Samsung had continued to sell the Note 7, it would have faced an increasing number of carriers refusing to sell it and even a possible ban in the US.
"In the worst-case scenario, the US could conclude the product is fundamentally flawed and ban sales of the device," said Song Myung-sub, an analyst at HI Investment Securities.
Analysts have estimated that the cost to Samsung of the Galaxy Note 7 could be $17 billion, the amount the company was expected to bring in from the sales cycle of the phone. That figure doesn't include the damage to the Samsung brand, though.
Business Insider
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