Galaxy Note 7 Batteries Explode – Samsung Value Drops $7 Billion

Samsung is reeling following reports that its new flagship smartphone, the Galaxy Note 7, is catching fire and exploding. In response, the company has halted all shipments of the device, delayed its release in Europe, and is expected to announce a global product recall. As a result, Samsung’s market value has plummeted by nearly $7 billion.

The Korea Herald – a newspaper in South Korea, which is the home of Samsung and one of the first global markets to receive the Galaxy Note 7 – reports that the handset is prone to spontaneous battery overheating, resulting in fires or explosions.

This Baidu user shared the following images of a Note 7 after it had exploded while charging:

“Samsung has stopped supplying the phones even though preorders have not yet been shipped,” an anonymous spokesperson for one of South Korea’s mobile carriers told The Korea Herald. “It is unclear whether the suspension is because of production constraints or a probe into the recent explosions.”

Samsung was confident that the Note 7 would continue the company’s upwards sales trend against Apple over the last few months, and that the phone’s release would solidify its status prior to the Cupertino company’s new iPhone, set 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 told Fortune. “The pending Apple launch puts all the more pressure for them to contain this quickly. The timing of this couldn’t have been worse.”