Samsung's Galaxy Note7 problem has gone from bad to worse. After a complete recall of phones with exploding batteries, and a costly replacement program for customers, and most recently a continuing fire issue with replacement phones, Samsung is asking customers to return all Galaxy Note7s — including replacement devices both locally and internationally — for a full refund or exchange to a different device.
Customers are being told to power off their replacement or original Note7, and return it to their place of purchase in Australia, where it can be exchanged for a Galaxy S7 or S7 Edge or a full refund.
Samsung's statement is below (emphasis ours):
As reported globally, Samsung Electronics is currently investigating the recently reported cases involving the Galaxy Note7. As a precautionary measure, we recommend that customers power down their Note 7 device and take advantage of the remedies available whilst these investigations are taking place.
Customers in Australia who have a Galaxy Note7, both an original device purchased before 5 September 2016 or a new replacement device, should power down their phone and contact their original place of purchase. Samsung Australia is working with all its partners to ensure all customers can receive an exchange - including a Galaxy S7 or S7 edge - or full refund for their Galaxy Note7.
Before returning their Galaxy Note7, customers should back-up their data, complete a factory reset to delete personal information and power down their device. We sincerely regret the inconvenience caused to our Australian customers and thank them for their patience.
Today's announcement is a second, even more serious blow for Samsung and the Galaxy Note brand. After the phone's first recall a fortnight after launch in late August, Samsung began deliveries of replacement Galaxy Note7 devices — with distinct visual and software cues to mark them as safe. Those replacement phones are not sufficiently safe, Samsung has decided — and will voluntarily ask for customers to return of all Note7s in Australia and worldwide, again — a recall in everything but name.
It is not immediately clear whether Samsung will offer a third replacement Note7 device at all, as production at Samsung's Vietnam finishing plant for the Note7 has been temporarily halted. In Australia, some telcos like Vodafone and Telstra are offering customers a choice of alternative devices to switch to, and Samsung will again offer the same refund program that it made available during the the initial recall.
An official announcement from Samsung both worldwide and in Australia, as well as the telco's local retail and carrier partners, is believed to be planned for early afternoon today Sydney time. Samsung stock is dropped over 15 per cent in after-hours trade on rumours of the recall yesterday but stabilised to an overall 4 per cent drop so far today.
Yonhap News first reported that the company has temporarily halted production of replacement models of the Galaxy Note7, working with product safety regulators in Korea, the United States and China. Final production of the Note7 occurs at a Samsung-contracted plant in Vietnam.
The Korean Agency for Technology and Standards has said that 85 per cent of original 456,000 Galaxy Note7 smartphones sold in Samsung's home country had been successfully returned for replacement. If a similar percentage in Australia were recalled, approximately 7500 of the 51,060 phones sold locally would still be in the hands of customers, with an unknown number of replacements also delivered to users.
A Telstra spokesperson supplied Gizmodo Australia with the following statement in reference to earlier reports that a temporary pause had been placed on local replacement devices being delivered to customers by the telco:
"We have temporarily paused shipping replacement Galaxy Note7 smartphones to our customers while Samsung investigates reported incidents in the U.S. We have asked Samsung to provide us with an update on their investigations as a matter of priority and will update our customers as soon as we learn more.
"In the meantime we are helping customers with loan phones and for those who do not wish to wait for the exchange program a change-over to an alternative smartphone."
Vodafone has supplied a similar comment: "Vodafone is pausing the replacement program for the new Samsung Galaxy Note7 following reported incidents overseas. We'll keep customers updated on the status of this program as we receive more information from Samsung.".
Yesterday, Samsung released a statement saying that it had halted production and delivery of replacement devices in Australia while the company investigated ongoing battery fire issues with supposedly safe Note7s internationally.
Gizmodo has contacted Samsung, Telstra, Optus and Virgin for comment. We will update this story with any statements as they become available.