Samsung Electronics says to sell refurbished Galaxy Note 7s

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A customer tries out a Samsung Electronics' Galaxy Note 7 at the company's headquarters in Seoul

By Se Young Lee

SEOUL (Reuters) – Tech giant Samsung Electronics Co Ltd <005930.KS> said on Monday it plans to sell refurbished versions of the Galaxy Note 7 smartphones that were pulled from markets due to fire-prone batteries.

The Note 7s were permanently scrapped in October, roughly two months from the launch of the near-$900 devices, as more of the phones self-combusted despite a global recall initiated in September. A subsequent probe found manufacturing problems in batteries supplied by two different companies – Samsung SDI Co Ltd and Amperex Technology Ltd.

Analysis from Samsung and independent researchers found no other problems in the Note 7 devices except the batteries, raising speculation that Samsung will recoup some of its losses by selling refurbished Note 7s. The company estimated a $5.5 billion profit hit over three quarters from the Note 7’s troubles.

Samsung, which had sold 3.06 million Note 7s to consumers before taking the phones off the market, had not previously said what it plans to do with the recovered phones. A person familiar with the matter told Reuters in January that it was considering the possibility of selling refurbished versions of the device or reusing some parts from the recalled phones.

“Regarding the Galaxy Note 7 devices as refurbished phones or rental phones, applicability is dependent upon consultations with regulatory authorities and carriers as well as due consideration of local demand,” Samsung said in a statement, adding the firm will pick the markets and release dates for refurbished Note 7s accordingly.

The company also plans to recover and use or sell reusable components such as chips and camera modules and extract rare metals such as copper, gold, nickel and silver from Note 7 devices it opts not to sell as refurbished products.

The firm had been under pressure from environment rights group Greenpeace and others to come up with environmentally friendly ways to deal with the recovered Note 7s. Greenpeace said in a separate statement on Monday that it welcomed Samsung’s decision and the firm should carry out its plans in a verifiable manner.

(Reporting by Se Young Lee; editing by David Clarke/Ruth Pitchford)

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