South Korean News: Samsung Halting Production Of Galaxy Note 7

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SEOUL, South Korea (CBSMiami/AP) -- South Korea's largest news agency says Samsung has temporarily halted production of their latest Galaxy Note 7 smartphone after replacement devices catch fire.

On Sunday, Yonhap News reported an official from a Samsung supplier made the announcement earlier this week.

Samsung Electronics seemed to have its smartphone troubles under control — until authorities had to evacuate a Southwest Airlines flight in Kentucky last week for an incident that involved a replacement phone.

The reason: Authorities said a Samsung smartphone started smoking and making "popping" noises, just moments after its owner had boarded the plane and turned off the device.

Passenger Brian Green, 43, says the device was a Galaxy Note 7 he had picked up from an authorized AT&T retailer Sept. 21 as a replacement for another Note 7 phone he returned when Samsung announced a global recall a week earlier. The recall came after a series of incidents last month in which Note 7 batteries overheated or caught fire. But Samsung had promised that the replacement models were safe.

Please ReTweet: Samsung says it's 'working diligently' as fifth replacement Note 7 burns - The V... https://t.co/RZB0wC8kWo #GalaxyNote7

— Galaxy Note 7 (@GalaxyNote_7) October 10, 2016

Reports of more replacement phones catching fire are trickling in, and the South Korean tech giant faces more scrutiny after earlier criticism for being slow to react and sending confusing signals in the first days of the recall.

"They're in a really tricky spot," said Ben Bajarin, a tech industry analyst with the Creative Strategies research firm. "There's such a stigma around this device now that it's hard to see how sales can do well going forward."

Consider Green's reaction: "I really liked the device. It had a lot of nice features," he told The Associated Press in an interview Friday. But after the incident on the plane, he bought a new iPhone 7 from Apple, rather than take his chances with yet another Samsung Note. "At this point, I don't want to mess with it anymore."

Authorities haven't confirmed what model of Samsung phone was involved in last week's incident. A spokeswoman for the Consumer Product Safety Commission said Friday that her agency is still investigating and had no further information.

AT&T, one of the nation's largest phone retailers, said Sunday that it will stop giving customers the replacement phones.

"We're no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents," A&T said in a statement.

AT&T encouraged customers with Note 7 phones to exchange them for other products. The company says it hasn't sold Note 7 phones since the initial recall was announced.

Verizon, another major seller of smartphones, said it doesn't have any Note 7 phones but they are on back order. Sprint said customers can exchange their replacement Note 7 phones for any other device while the situation is being investigated.

Meanwhile, other customers have reported problems with their replacement phones.

A Minnesota father says his daughter suffered a minor burn to her thumb when her replacement Samsung smartphone melted in her hand last week.

Andrew Zuis of Farmington, a Twin Cities suburb, said his daughter, Abby, was holding the Galaxy Note 7 in her left hand Friday when it melted. Zuis told The Associated Press on Sunday that the family had acquired the new phone on the day the replacement phones were released. There had been no problem with the original phone, he said.

"It's very fortunate Abby was not injured and was holding the phone," Zuis said. "If it was in her pocket, I think it would have been a whole different situation. I'm just very disappointed in Samsung and their product."

Zuis provided KSTP-TV with receipts showing that the family bought a Galaxy Note 7 in August and then exchanged it Sept. 21 after Samsung announced the recall.

"She's done with Note 7s right now," Zuis said of his daughter.

A Samsung representative told KSTP that an investigation is underway.

"We want to reassure our customers that we take every report seriously and we are engaged with the Zuis family to ensure we are doing everything we can for them and their daughter," the representative said in a statement.

On Saturday, Michael Klering, a Kentucky resident, said on Facebook that his exchanged Note 7 phone caught fire. Klering wrote on Facebook that he and his wife woke up because their bedroom was filling with smoke, and they feared that their children were in danger.

Klering wrote that he and his wife now have bronchitis and are being treated. He said he doesn't feel the company is taking the situation seriously enough.

Commission officials and Samsung announced a formal recall Sept. 15 after authorities said they received 92 reports of Note 7 batteries overheating in the U.S., including 26 reports of burns and 55 cases of property damage. Authorities urged consumers to turn off the phones and return them for a refund or replacement. Samsung said replacement models that were free of defects became available in this country Sept. 21.

After the Southwest Airlines incident, representatives of the four leading U.S. wireless carriers said customers who had already received replacement Note 7 phones could return those new devices if they have concerns.

The Galaxy Note 7, which sells for $850 to $890, competes in the high-end smartphone market with Apple, which recently released a new iPhone 7, and other premium brands such as Google's new Pixel phones.

Samsung says it has recalled about 2.5 million Note 7 devices around the world since problems emerged last month. Analysts estimated the recall would cost the South Korean tech giant as much as $1.8 billion.

Still, the company said Friday that its third-quarter profit still rose 6 percent, to about $7 billion, on total sales of $43.9 billion — thanks to income from Samsung's other products, which include advanced computer chips and high-end smartphone displays.

The Note 7 isn't Samsung's biggest seller. The company sold 76 million smartphones in the second quarter of 2016, most of them lower-priced models. Among higher-priced models, Bajarin estimated that Samsung sold well over 10 million Galaxy S7 phones, or four times as many as the Note 7, which has a digital stylus and other distinctive features.

But Bajarin said he's heard some independent manufacturers may cut production of cases and accessories for the Note 7, in light of slipping sales. He also suggested that some wireless carriers may be hesitant to promote the Note 7 heavily in their retail stores.

As for Green, the Indiana businessman told The Associated Press that he had checked to make sure the phone he got on Sept. 21 had the packaging marks and a green battery indicator that Samsung said would show it wasn't subject to the recall.

"I don't know what else you're supposed to do," he said.

A photo of the phone's packaging, which Green provided to The Associated Press, shows a black square on the label, which Samsung has said would indicate a non-defective phone. The label also has an identifying number that, when typed into Samsung's recall website, returns a message that says, "Great News! Your device is NOT in the list of affected devices."

Green said he had no problems with the replacement until Oct. 5, when the smoke caused him to pull the device from the front pocket of his jeans. After authorities ordered everyone off the plane, Green said he later saw singe marks on his jeans. An airline representative said the phone scorched the carpet where Green left the device on the airplane floor.

After speaking with authorities by phone last week, Green said he had an appointment to meet with them Monday. In a statement last week, Samsung said there was "no evidence that this incident is related to the new Note7." Samsung and AT&T representatives didn't respond Friday to a reporter's questions about how a defective phone might have been provided as a replacement after the recall.

(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)