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Samsung offers incentives to stem Note 7 bleeding

Thursday, October 13, 2016 - 01:47

Samsung Electronics has begun offering financial incentives to customers in South Korea who exchange Galaxy Note 7 smartphones for other Samsung models, as it scrambles to shore up its reputations in the wake of the damaging safety crisis. Sonia Legg reports.

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Samsung's shops are buzzing but many customers are getting their money back. A massive operation to refund Galaxy Note 7 owners has begun. The fire-prone device has been withdrawn from sale. And Samsung is offering incentives to customers who exchange rather than return them. (SOUNDBITE) (English) FARMER, BRUCE PIKE SAYING: "They offered $250 discount to take it and then I'm getting a refund." (SOUNDBITE) (Korean) 38-YEAR-OLD SOUTH KOREAN BUSINESSMAN, KIM CHAN-YOUNG, SAYING: "I bought the Note7 because I liked it more than S7 edge so I've decided on a refund. But if Samsung launches a new product, I'll try it." Samsung is desperate to shore up its reputation - as rivals like Apple, Huawei and LG try to steal market share. It's boosting its marketing and promotional efforts, including offering $100 to U.S. consumers who exchange. It all had a positive impact on shares - after days of heavy losses they ended 1.4 percent higher, while the broader market fell. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "The pain for Samsung essentially applies only to the Note 7. It is a relatively minor part of their product set. They have launches planned for 2017. The brand value has been relatively strong and this is a company with very high free cash." U.S. authorities say Samsung has received 96 reports from America of batteries in Note 7's overheating, 15 of them since the mid-September recall. The South Korean firm is now sending fireproof boxes and protective gloves to customers returning them. That's attracted much hilarity on social media and perhaps highlighted the extent of the challenge facing Samsung. South Korea's economic growth could also be undermined, according a warning from the central bank.

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Samsung offers incentives to stem Note 7 bleeding

Thursday, October 13, 2016 - 01:47