Samsung’s share price tumbles over Note 7 smartphone recall

Samsung’s share price tumbles over Note 7 smartphone recall

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Samsung’s share price has tanked as it grapples with a vast product recall following reports its flagship Note 7 smartphone keeps bursting into flames.

Shares sank more than 7% to a near two-month low after US aviation authorities warned flyers not to use the device, which has been seen exploding or catching fire after charging.

Its sharp fall on the Korean stock market will prove food for thought for Lee Jae-yong, the only son of its ailing chairman, who was nominated to join the Samsung Electronics board of directors on Monday.

The 48-year-old Harvard-educated vice chairman at Samsung is thought to have been making key decisions for Samsung since his father Lee Kun-hee, 74, fell ill.

Samsung has seen its market value come under further pressure after America’s aviation regulator – The Federal Aviation Administration – issued a warning against the Note 7 on Thursday.

Many airlines, including Australia’s Qantas, have immediately enforced its advice.

In a further blow to the company, the US Consumer Product Safety Commission has also urged American users to turn the phones off and leave them off.

The world’s largest smartphone maker scrambled to address the problem last week, recalling 2.5 million Note 7 phones and vowing to replace all the devices which have been handed in.

The fiasco looks set to be a costly set-back in its hard-fought battle against Apple to dominate the global mobile phone market.

Samsung’s Note 7 had sought to up the ante on Apple’s iPhone with its dual-curved screen and water-resistant technology.

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