Update: Samsung Recalls Galaxy Note7 Due to Battery Fires, Initiates Exchange Program

Update 09/02, 8:20pm ET: Moving quickly, Samsung has esbtablished a product exchange program for Note7 owners in the US. Samsung is giving owners the option of either replacing the Note7 with a fixed unit starting next week, replacing it with an S7 and refunding the difference. Under most circumstances, Samsung is also offering an additional $25 gift card or bill credit for the trouble.

1. Exchange current Galaxy Note7 device with a new Galaxy Note7 (available next week)
2. Exchange current Galaxy Note7 for a Galaxy S7 or Galaxy S7 edge and replacement of any Note7 specific accessories with a refund of the price difference between devices.

The carriers meanwhile have their own programs to augment this, including offering loaner phones until the fixed Note7s are ready, and of course handling full refunds.

Update 09/02, 4:30am ET: According to Bloomberg, Samsung has initiated a global recall of the Galaxy Note7. All users who already have Galaxy Note7s will receive a replacement device. According to CNN Money, Samsung is aware of 35 cases thus far.

Samsung has also released an official statement on their website.

Samsung has reportedly stopped shipments of the newly launched Galaxy Note7 amid reports that some units have caught fire after being received by users. The news was originally reported by Reuters after a number of users posted photos and videos of charred Galaxy Note7 phones online. According to the report, news sources in South Korea are also reporting that Samsung plans to launch a recall of the defective units so their batteries can be replaced, although this has not been confirmed by Samsung at this time.

While Samsung declined to comment on the initial reports, they have since released the following statement:

“In response to questions on Galaxy Note7, we are conducting a thorough inspection. We will share the findings as soon as possible. Samsung is fully committed to providing the highest quality products to our consumers.”

It’s not yet clear how extensive the issue is, but even a small percentage of the total units sold would represent a substantial recall. It was originally reported that shipments had stopped in South Korea, and later reports from news outlets and users have stated that the shipment delays are in effect in several markets worldwide. Some sources are reporting that there may be a complete recall of the phones to ensure that all potentially defective units are taken off the market. Such a recall would be unprecedented in the mobile space, and it would be a significant blow to Samsung after launching the Galaxy Note7 just last month to favorable reviews from tech publications and users alike.

The news caused a decline in Samsung Electronics Co Ltd’s stock value, with seven billion dollars being knocked off its market value as of last Thursday. Without knowing the extent of the problem, it’s difficult to say where things will go from here for Samsung and the Galaxy Note7. With any luck there will be further communication in the coming days from Samsung about the issue and their plans to resolve it for affected users.

Google Cans Project Ara: No Modular Smartphones Incoming

Word comes this week that Google has given up its plans to build modular smartphones with interchangeable parts, having cancelled all ongoing Project Ara efforts. According to reports by Reuters and Re/code.it appears that the price of the final handsets was going to be so high as to make viability questionable, as the modular phones lost some of the cost and performance advantages of hardware integration. The company reportedly plans to concentrate on other hardware projects, including its Chromebooks and various Android-based devices.

Google began to explore the concept of modular smartphones in 2012, and publicly announced its Project Ara in late October, 2013. The company thought that for many people it would make sense to configure their smartphones themselves and then upgrade modules, as new ones come out, instead of getting entirely new handsets.

Initially, Google considered building a fully modular smartphone with a PC-like architecture in a bid to enable upgrades of core components like SoC, antenna, sensors and so on. However, this required a lot of efforts in hardware standardization, interconnection, compatibility as well as software support. Back in May, the company announced changes of the Project Ara concept. Google said that core components of modular smartphones would not be upgradeable, but users would still be able to switch camera sensors, speakers and even add secondary displays. Google promised to introduce a working Project Ara model this fall and then release a commercial product for consumers in 2017.

Modern smartphones are self-contained, cannot be upgraded and their repair is often tricky at best. However, such integration allows manufacturers to make them sleeker and cheaper. By contrast, Google’s modular design appeared to be rather bulky. Moreover, Re/code reports that Google struggled to come out with a modular smartphone that could perform up to expectations and come in at a viable cost. The price of modules themselves was also a potential concern, as they’d need to be built to handle the modular system and wouldn’t necessarily enjoy the high volume sales of a solitary phone design.

As it turns out, Rick Osterloh, the new senior vice president of hardware at Google, decided to cancel Project Ara even in its “limited” form announced back in May. The company will no longer invest in the project, but may license technologies and patents it developed over the past several years to parties interested in building their upgradeable smartphones, according to reports. Keep in mind though that Google yet has to confirm its intentions regarding Project Ara.

Recently Motorola came up with the Moto Mods idea to sell add-on accessories for its Moto Z smartphones. The add-ons can transform the handset into a camera with decent optics, a projector or a stereo system. Apparently, even though Project Ara is gone for good, the concept of add-ons for smartphones lives on.

Sources: Reuters, Re/code, The Verge.