Samsung mobile recovery suffers blow as Galaxy Notes catch fire

SEOUL: Samsung Electronics Co Ltd´s mobile recovery was under pressure on Thursday after it delayed shipments of its premium Galaxy Note 7 smartphone amid reports of exploding batteries, wiping almost $7 billion off its market value.

Investors drove the stock to two-week lows after the global smartphone leader told Reuters late on Wednesday the shipments has been delayed for quality control testing, and that shipments to South Korea´s top three mobile carriers had been halted.

Faults with the new flagship device could deal a major blow to the South Korean giant, which was counting on the Galaxy Note 7 to maintain its strong mobile earnings momentum against Apple Inc´s new iPhones expected to be unveiled next week.

"This is some major buzz-kill for Samsung, especially given all of the hard-earned excitement that products like the Note 7 have been garnering lately," IDC analyst Bryan Ma said.

"The pending Apple launch puts all the more pressure for them to contain this quickly.

The timing of this couldn´t have been worse.

"Samsung did not comment on what problem it was trying to address or whether other markets were affected besides South Korea.

Sister company Samsung SDI Co Ltd said that while it was a supplier of Galaxy Note 7 batteries, it had received no information to suggest the batteries were faulty.

Several people posted images and videos of charred Galaxy Note 7s online and said their phones had caught on fire.

"Be careful out there, everyone rocking the new Note 7, might catch fire y´all," one user said in a YouTube clip showing a burnt Note phone.  It was not immediately possible to confirm the veracity of the clip.

Samsung´s shares, which hit a record high of 1.694 million won last week, dropped 2.5 percent as of 0508 GMT, and Samsung SDI tumbled 6.1 percent, versus a 0.2 percent fall for the broader market.