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SUMMARY: Samsung has announced that it's halting production of the Galaxy Note 7 smartphone. The news comes after reports of the replacement phones catching fire -- just like the original models -- and on the same day that the battle between Apple and Samsung was set to be heard before the Supreme Court. Hari Sreenivasan speaks with Backchannel's Jessi Hempel for more.
HARI SREENIVASAN (NewsHour): It's an eventful day and a humbling one for the electronic giant Samsung, the world's largest maker of smartphones.
Today, the company announced that it is halting production of its beleaguered Galaxy Note 7 phone. Reports of the Note 7 catching fire caused the company to issue a recall and then create replacement devices that were also found to be a fire risk.
It comes, coincidentally, as a prolonged battle between Apple and Samsung over money, patents and the designs of those phones you use went before the U.S. Supreme Court today.
Jessi Hempel is with Backchannel, a Web-based platform that covers the tech world. She joins us now.
So, tell us a little bit about the issues surrounding this. We have seen dribs and drabs of people saying, look at this burned-out battery, look at this burned-out shell. How long has this been going on? How serious it is?
JESSI HEMPEL, Backchannel: Well, it's quite serious.
I mean, it's really impossible to underestimate how serious this is for Samsung. It's been a month-and-a-half. You know, at first, when the phones started catching fire, Samsung acted decisively and immediately and got a lot of credit for that. It said, we issued a recall. People went and returned their phones.
And then the new phones started catching fire. And that's when it became a very serious problem for Samsung. It suggests that we really can't trust the brand. And, frankly, when people think about this, yes, maybe they will remember that it's the Samsung Galaxy Note 7, or maybe they will just think about the brand name Samsung.
HARI SREENIVASAN: Right. And that's a big company. They make everything from washers and dryers to lots of other bigger things.
JESSI HEMPEL: Yes. Right.
HARI SREENIVASAN: But how important is this? This is sort of the flagship phone, the thing they're supposed to be the most proud of.
JESSI HEMPEL: This is their flagship phone. And, therefore, it's really important. And it's important for a couple reasons.
First off, this was what they put forward to compete with Apple's new iPhone. And, quite frankly, it didn't work. It will be a huge financial loss for the company. Now, it's hard to say exactly how much, and it will be a while before we know, but I have seen estimates put it at between $4 and $5 billion. So it's very important.
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