Samsung has started replacing Galaxy Note 7s in South Korea after it announced a recall of the smartphones due to faulty batteries that caused phones to set on fire. As Sonia Legg reports, the scale of the recall is unprecedented for the world's top smartphone maker, which had been counting on the device to compete with Apple's new iPhones.
A new phone for a South Korean customer - at no charge. Samsung has started replacing Galaxy Note 7s after their batteries became a fire risk. (SOUNDBITE) (Korean) 54-YEAR-OLD SOUTH KOREAN SAMSUNG GALAXY NOTE 7 USER, YOO JAE-SOOK, SAYING: "I was really worried when this happened with my new smartphone. I feel relieved now that Samsung has exchanged it." Many others are still waiting. Samsung sold 2.5 million phones with suspect batteries - the scale of the recall is unprecedented for the world's top smartphone maker. Sales of Note 7s are also still on hold in many countries. With Australia likely to see a resumption in early October. (SOUNDBITE) (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "There are reports that Samsung will bring forward the date for their Galaxy 8, which of course would be its new top end phone, to divert attention away from the crisis affecting the current device but again while they may be able to divert attention it's very difficult to know the financial costs at this stage." Samsung had been counting on Note to compete with Apple's new iphone and maintain its smartphones sales in the second quarter. (SOUNDBITE) (Korean) 50-YEAR-OLD SOUTH KOREAN SAMSUNG GALAXY NOTE 7 USER, LEE JAE-MAN, SAYING: "Galaxy Note 7 is my first ever smart phone ever, so the explosion made me feel flustered but Samsung's response has been excellent, I believe any economic loss can be recovered." Optimism from customers won't help Samsung pay the recall costs. But it might help repair the firm's tarnished image and limit further damage.