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Samsung Galaxy Note 7: We could soon hear of a second recall

Carmela Zoppi | 07 Ottobre, 2016, 19:13

The owner of the Note 7 that started smoking in the aircraft told to investigators that the device was a replacement unit, Captain Kevin Fletcher of the Louisville Metro Arson Squad said.

The Korean electronics titan could face an unusual second recall of its Galaxy Note 7, according to Bloomberg, citing two former USA safety officials. Samsung ceased sales in the USA on September 2 and began an exchange program for customers who had already purchased a phone.

The Federal Aviation Administration (FAA) and the Consumer Product Safety Commission (CPSC) are now investigating the latest incident.

Analysts estimate the cost of the recall could be as much as $1.8bn (£1.4bn) as Samsung ships the phones back and replaces them with new Note 7 phones and safe lithium-ion batteries. The company didn't offer an update Thursday and a spokeswoman had no immediate reply to a request for comment on the possibility of another recall.

Samsung officially recalled one million of its Galaxy Note 7 mobile phones sold before September 15 after finding that some of their batteries had exploded or caught fire. "We are working with the authorities and Southwest now to recover the device and confirm the cause", Samsung said in a statement. "Once we have examined the device we will have more information to share" Samsung said in an email. It exempted the "new" Note 7 from the earlier order banning flyers from carrying Samsung Galaxy Note 7 and 2 in check-in bags and from switching them on or charging in flight.

The photos show the device can be seen giving off smoke before it explodes and then bursts into flames. He dropped it on the floor of the plane and a "thick grey-green angry smoke" was streaming out of the device. A day before Samsung's Q3 earnings preview, shares jumped 4.5 percent to a new record high after US activist investor Elliott Management Corp. argued that Samsung was undervalued by as much as 70 percent. Meanwhile, the CPSC is investigating the plane incident, while the Galaxy Note 7 continues to be on sale in several countries.

Expectations remained uncertain for Samsung's fourth-quarter earnings as the confused recall process disappointed global consumers. Elliot Management, an activist investor, has called on the company radically restructure itself, including and paying out a one-time $27 billion dividend to shareholders, from its reported $70 billion cash reserve.

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