Samsung to replace or refund one million U.S. Galaxy Note 7 phones

By Ankur Banerjee

(Reuters) - Samsung Electronics Co Ltd formally recalled 1 million Galaxy Note 7 smartphones sold in the United States, replacing or refunding the flagship phones, whose susceptibility to catching fire has damaged the image of the Korean powerhouse.

Samsung received 92 reports of batteries overheating in the United States, including 26 reports of burns and 55 cases of property damage, the company said as it announced the recall in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

The recall is a costly setback for Samsung, which was counting on Galaxy Note 7 to bolster sales as rivals such as Apple Inc launch new devices. The scale of the recall is unprecedented for Samsung, the world's largest smartphone maker.

Samsung said on Thursday that new Note 7 replacement devices will be available at most retail locations in the United States no later than Sept. 21.

Earlier this month, Samsung said it would recall all Note 7 smartphones equipped with batteries it found to be fire-prone and halted their sales in 10 markets, denting a revival of the firm's mobile business.

While recalls in the smartphone industry do happen, including for rival Apple Inc , the nature of the problem for the Note 7 is a serious blow to Samsung's reputation, analysts have said.

The CPSC said on Thursday that consumers should immediately power down and stop using the recalled Galaxy Note 7 devices.

The U.S. Federal Aviation Administration has asked airline passengers to switch off and unplug the recalled Note 7s during flights.

Some 2.5 million of the premium devices worldwide need to be recalled, Samsung said. Some analysts say the recall could cost Samsung nearly $5 billion in lost revenue this year.