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Samsung to compensate Galaxy Note 7 suppliers for unused components

The development comes after the South Korean government and central bank officials expressed concern over the possible impact Samsung’s Note 7 debacle could have on the country’s economy.

Following the global recall of the Galaxy Note 7 devices owing to safety issues, Samsung is still recuperating from the massive losses incurred in the form of shares and reputation. Even as Samsung is recalling the units, and offering customers replacement units and full refunds, the company is also looking to compensate its Note 7 suppliers for the unused parts. Samsung is also considering giving its suppliers orders for other models to cushion the blow, Reuters reports. Also Read - Samsung Galaxy M32 India launch set for June 21, price could range between Rs 15,000 - Rs 20,000

Also Read - Samsung Galaxy Z Fold3, Galaxy Z Flip3 launch on August 27? New report suggests

Launched in August 2016, the Samsung Galaxy Note 7 was recalled globally earlier this month following numerous reports of the explosion. The company did release ‘safe’ units later, but those too grappled with the issues of overheating and catching fire, ultimately turning Samsung s aim at restoring consumer faith to ashes. For consumers, carrying the device became a criminal offense, and for airlines tackling the passengers carrying the device became a security concern. With bans imposed across regions where the Note 7 was being used, Samsung eventually had to tell users to stop powering the device, and suspend the smartphone altogether. Samsung’s short-lived stint with the Galaxy Note 7 has now left suppliers in a limbo with unfinished units and raw materials lying purposeless. Also Read - Samsung now lets you make an appointment to shop at its stores, book demo via WhatsApp

Samsung has reportedly announced that it will not only fully pay suppliers for unused Note 7 parts, which have been already manufactured but it also plans to compensate them for any unused Galaxy Note 7 raw materials bought by the suppliers to make the flawed device. The company said in a statement that it will determine the inventory levels for the partner companies and carry out compensation quickly. ALSO READ: Samsung India offers Galaxy S7, S7 edge as replacement to customers who pre-ordered Galaxy Note 7

It is unclear how much the South Korea-based company will pay to the suppliers for the components of Galaxy Note 7. However, Samsung is expected to give the concerned suppliers orders for other models to help tackle the losses. The decision to compensate the suppliers comes after the South Korean government and central bank officials expressed concerns about the impact Galaxy Note 7 fiasco could have on the domestic economy. South Korea’s deputy finance minister said the fallout could hurt the economy during the third and fourth quarters of the year, the report notes.

Samsung smartphones are mostly manufactured outside South Korea but the company is a key customer for a lot of local component makers including the company s own affiliate Samsung Electro-Mechanics Co Ltd. The company is expected to face a whopping $5 billion in losses owing to the Note 7 catastrophe. ALSO READ: Samsung sends fireproof boxes to collect potentially explosive Galaxy Note 7 units

In order to help facilitate global recalls, the company recently introduced fire-proof boxes to collect the potentially explosive Note 7 units from customers. Late last week, Samsung mobile chief Dong-Jin Koh issued a public apology on the company s behalf for the Galaxy Note 7 fiasco. At a press conference in South Korea, Koh expressed his deep frustration with the entire Galaxy Note 7 fiasco. He bowed in front of the gathered media and promised that the company would at any cost find the exact cause (behind the Galaxy Note 7 battery issues) to restore the trust of consumers so that they can use Samsung products without any safety concerns.

According to a report on Fortune, Samsung is working to identify the cause of the combusting batteries in its Note 7 devices. The company is now testing the potentially flawed batteries at its internal facility. While the Samsung lab is certified by the CTIA, a trade organization that oversees and approves the safety standards manufacturers apply to phones that go on sale with America s biggest wireless carriers, Samsung is said to be the only such manufacturer to use internal battery testing facilities for the certification.

The Note 7 debacle is expected to haunt Samsung for a long time and that the only way out for the manufacturer is to ensure, with quality standards in place, that its upcoming products do not explode at will. With the launch of Galaxy Note 7, the company hoped to momentum it had picked with the success of the Galaxy S7, and also to compete with the Apple iPhone 7 and iPhone 7 Plus. However, the fiasco not only pushed the company levels behind in the smartphone race but paved way for new entrants like Google to aggressively push its newly-branded Pixel phones. Now, all hopes rest on the rumored Galaxy S8, which many speculate will help Samsung make a fresh, less explosive, start. ALSO READ: After AirAsia, Vistara bans Samsung Galaxy Note 7 phones on its flights

For the latest tech news across the world, latest PC and Mobile games, tips & tricks, top-notch gadget reviews of most exciting releases follow BGR India’s Facebook, Twitter, subscribe our YouTube Channel. Also follow us on  Facebook Messenger for latest updates.
  • Published Date: October 18, 2016 1:15 PM IST
  • Updated Date: October 18, 2016 1:34 PM IST



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