Batteries Caused Note 7 Fires, May Delay New Phone Launch: Samsung

Investors said Samsung needs to reassure consumers that it is on top of the problem and can be trusted to fix it.

Samsung Electronics Co Ltd indicated on Monday that its latest flagship Galaxy S smartphone could be delayed as it pledged to enhance product safety following an investigation into the cause of fires in its premium Note 7 devices.

Wrapping up its months-long probe, the world's top smartphone maker said faulty batteries from two suppliers were to blame for a product failure that wiped $5.3 billion off its operating profit.

Samsung mobile chief Koh Dong-jin said procedures had been put in place to avoid a repeat of the fires as the South Korean firm prepares to launch the Galaxy S8, its first premium handset since the Note 7’s demise.

"The lessons of this incident are deeply reflected in our culture and process," Koh told reporters at a press briefing. "Samsung Electronics will be working hard to regain consumer trust."

Koh said the Galaxy S8 would not be unveiled at the Mobile World Congress trade show in Barcelona beginning 27 Feb, the traditional forum for Galaxy S series launches. He did not comment on when the company planned to launch the handset, though analysts expect it to start selling by April.

Investors have said Samsung needs to reassure consumers that it is on top of the Note 7 problem and can be trusted to fix it.

Samsung's reputation took a hammering after it announced a recall of fire-prone Note 7s, only for reports to emerge that replacement devices also caught fire. Images of melted Samsung devices spread on social media and airlines banned travellers from carrying them on flights.

The handset, Samsung's answer to Apple Inc's iPhones, was withdrawn from sale in October less than two months after its launch, in one of the biggest failures in tech history.

Samsung said later on Monday it has not decided whether to reuse parts in the recovered Note 7s or resell any recalled phones. A person familiar with the matter told Reuters reselling some Note 7s as refurbished phones was an option.

The firm said it has recovered 96 percent of the 3.06 million Note 7s sold to consumers.