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Samsung: temporarily halts production of the Galaxy Note 7

Samsung has confirmed that it is “adjusting” Galaxy Note 7 shipment volumes as a response to the reports of “safe” units catching fire. The move should give the company better control over the revised units’ quality, as well as the chance to perform thorough inspections. No further clarifications on the matter have been given, hence we’re not sure if deliveries of the Note 7 have been halted or slowed down.

According to South Korea’s Yonhap News Agency, Samsung has temporarily suspended production of the Samsung Galaxy Note 7 replacement units. This news comes from an unnamed source who works for a company that partners with Samsung. This past week has been a disaster for the phablet with at least four explosions of replacement units taking place.

Earlier today, both AT&T and T-Mobile announced that they were no longer allowing subscribers to exchange their recalled Galaxy Note 7 handsets for the replacement models. In addition, neither carrier will sell you the phablet. A South Korean government official repeated previous warnings that the phone should not be used or charged inside airplanes.

Will this temporary production halt be the end of the Samsung Galaxy Note 7 and the entire Galaxy Note line? The phablet got off to a great start when originally launched in August. But with one recall under the belt and a second one likely, the Galaxy Note name becomes a punchline for late night comedians and one that the public might be scared of buying in the future.

Samsung earlier said it was investigating reports of “heat damage issues” and would share its findings when the investigation is complete.

“If we determine a product safety issue exists, Samsung will take immediate steps approved by the CPSC (U.S. Consumer Product Safety Commission) to resolve the situation,” Samsung told Reuters in a statement.

Samsung shares were down 3.3 percent as of 0125 GMT, compared with a 0.1 percent fall for the broader market.

“I thought the Note 7 matter was coming to an end, but it’s becoming an issue again,” Alpha Asset Management fund manager CJ Heo said.

Samsung should be able to recover from the short-term reputational damage of the recalls, but fourth-quarter sales of the Note 7 would be hurt, he added.

South Korea’s largest mobile carrier, SK Telecom, said it was closely monitoring the situation and would not comment further. KT Corp, the No.2 South Korean carrier, said it had taken no steps in regards to sales or exchange of new Note 7s.

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