Samsung halts Galaxy Note 7 shipments after smartphone 'explosions'

Samsung Electronics shares took a hit after it admitted delaying shipments of its new Galaxy smartphone due to some consumer reports of handsets catching fire due to exploding batteries.

“Shipments of the Galaxy Note 7 are being delayed due to additional tests being conducted for product quality,” the South Korean giant said in a statement.

Sister company Samsung SDI, the main battery supplier of these large-screen phones, said it was waiting for results of an investigation into the problem.

Samsung Electronics saw its shares drop by as much as 3.5% at one stage on Thursday before closing down just over 2% as the quality issues followed delays to the launch of this latest smartphone model in some markets because production was unable to keep up with initial demand.

These hiccups come just a week before fierce rival Apple launches its new faster-running iPhone 7 and Apple Watch 2 on Wednesday 7 September.

Broker Hyundai Securities said such glitches were common and it still expected Samsung to report third-quarter operating profits of 8.5trn won (£5.7bn), and added that Samsung's medium-term prospects looked encouraging ahead of the launch of smartphones with foldable screens next year.