South Korean firm - the world’s top smartphone maker - says it is halting sales after multiple fire incidents.
Samsung has halted sales of its Galaxy Note 7 smartphones and told owners to switch them off while it investigates more reports of the flagship phones bursting into flames.
The world’s top smartphone maker said on Tuesday it had asked all global carriers to stop sales of Note 7s and stop exchanging original devices for replacements, while it worked with regulators to look into the problem.
"Consumers with either an original Galaxy Note 7 or replacement Galaxy Note 7 device should power down and stop using the device," the South Korean firm said in statement.
Samsung’s decision to pull Note 7s off the shelves for the second time in less than two months not only raises fresh doubts about the firm’s quality control but could result in huge financial and reputational costs.
Claire Reilley, senior writer at CNET Australia, told Al Jazeera "there were criticisms that Samsung did not move swiftly enough" after fires were first reported.
"I think the initial delay was because a recall is very scary for company as they think about brand damage, bottom-line and share price," she said. "They moved a lot more swiftly which is what they had to do in the second case."
READ MORE: No smooth sailing for Samsung smartphones
Top US and Australian carriers on Monday suspended sales or exchanges of the Note 7s, while aviation authorities banned passengers using the phones, after smoke from a replacement device forced the evacuation of a passenger plane in the United States last week.
Investors wiped 14.7 trillion South Korean won ($13.2bn) off Samsung Electronics’ market value at mid-day trade on Tuesday as shares tumbled 7 percent to touch a two-week low.
The premium device launched in August and was supposed to compete with Apple Inc’s latest iPhone for supremacy in the smartphone market. Well received by critics, its first problem was a shortage as pre-orders overwhelmed supply.
But within days of the launch images of charred Note 7s began appearing on social media, in the first sign that something was seriously amiss. Samsung has since recalled 2.5 million Note 7s due to faulty batteries.
"This has probably killed the Note 7 brand name - who knows if they’ll even be allowed to re-release it," said Edward Snyder, managing director of Charter Equity Research.
Samsung did not immediately comment on whether it was considering ending Note 7 sales permanently or whether it had identified the cause for the fires in replacement devices. The company is offering refunds and to exchange Note 7s for other products.
The Korean Agency for Technology and Standards met with Samsung and experts on Monday and "confirmed the possibility of defects in the new (Galaxy Note 7) product," the agency said in a statement on Tuesday.
The US Consumer Product Safety Commission said Samsung was making the right decision by halting sales and exchanges of the device.
The US Federal Aviation Administration and South Korea’s transport ministry added their voices to concerns from the aviation industry, saying no Note 7s should be used or charged inside airplanes.
Verizon Communications Inc, the largest US wireless carrier, said it may shift marketing away from the Note 7 heading into the critical holiday selling season.
Three other US carriers - AT&T, T-Mobile, and Sprint - suspended sales in September.
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