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Samsung says exploded Note 7 phone in China had no battery problem

Early on Monday, it seemed Samsung Electronics Co.’s smartphone problems had expanded to China, the world’s largest mobile market: Two people posted accounts on Chinese social media saying their Galaxy Note 7 handsets exploded over the weekend.  

But Samsung said its investigation into the first reported fire found no battery problem, reducing concerns. The South Korean tech giant said it was not able to investigate the other reported fire because it could not obtain that phone. 

The two accounts of Galaxy Note 7 fires were widely reported by Chinese and South Korean media, raising alarms because the South Korean tech giant earlier said no Note 7 recall was necessary in China because the phones sold there did not have the battery manufacturing error that caused fires in dozens of phones sold in other countries. 

Samsung announced the global recall of 2.5 million of its flagship smartphones two weeks after the phones were launched. 

It is struggling to restore consumer trust after 92 reports of Note 7 batteries that overheated or caught fire in the United States, which prompted an official government recall there last week. This week, the company began shipping new Note 7 phones to replace defective ones. 

The Chinese battery supplier for Note 7 phones sold in China said Monday that the fires there appeared to be different from those in other countries. 

“We believe the heat problem comes from outside the battery. A very large likelihood exists that other factors gave rise to the heat problem,” Amperex Technology Ltd. said. It gave no indication of what may have caused the problems. 

Samsung said its investigation suggested external heat had damaged the phone. South Korea's Yonhap News Agency and other South Korean media said the report of an exploding phone may have been an effort to tarnish Samsung. 

Samsung said it tried to obtain the phone involved in the second reported fire but was not able to do so. 

The Galaxy Note 7 recall has been Samsung Electronics' biggest crisis in recent years. Samsung has faced criticism that it failed to coordinate with government safety regulators and did not give clear information to consumers. Many airlines have banned use of the Note 7 on planes, saying it is a flight hazard. 

In its initial announcement Sept. 2, Samsung did not say whether people could continue to use the phones without danger. A few days later, it urged them to immediately turn off the phones. And last week, Samsung said it is rolling out a software update to the Note 7 phones that will limit the battery charge to 60% but didn't say whether all phones would automatically receive it. 

In South Korea, mobile carriers said Note 7 owners could begin exchanging their phones starting Monday, but there were few people doing so at a Samsung service center. 

South Korea's government has not issued an official recall like its counterparts in the U.S. and Canada. Monday is the deadline for consumers in South Korea to get a full refund. 

The Note 7 debuted to rave reviews in August thanks to its speed, new software features and longer time between charges, which requires a more powerful battery. But shortly after the launch, users began to report fires or explosions, in one case reportedly causing a blaze that destroyed an SUV

In the first incident reported in China, a social media user posted messages Sunday saying a friend's Galaxy Note 7 caught fire over the weekend. The messages included photos of the damaged phone. 

The user, contacted by phone, said the Note 7 was bought Sept. 1 through the JD.com ecommerce site. The man, who asked not to be identified by name, said the phone started to heat up and vibrate late Saturday night, then exploded and emitted black smoke. 

A report on a separate social media account said a phone exploded Sunday while the owner was playing a game on it. That account gave no contact information for the user nor details of where the person lives, but it showed photos of the damaged phone and its serial number. 

The incidents could set back Samsung's effort to stage a comeback in China, where it has slipped to No. 6 in a crowded market behind ambitious local brands, said Nicole Peng of research firm Canalys. 

Samsung accounted for 8% of smartphone sales in China in the April-through-June quarter, down slightly from the previous quarter's 9%, according to Canalys. Huawei was in first place in both quarters with 16%, followed by Vivo and Xiaomi at 13%. 

“This will make it difficult to make it back to the top,” Peng said. 

Samsung launched the Note 7 phone in China on Sept. 1, after reports began spreading of the phones catching fire in other nations. 

Samsung's mobile president, Koh Dong-jin, said at the time that sales in China would continue because Note 7 phones sold there use different batteries. 

Analysts believe Samsung SDI supplied most of the faulty batteries while Note 7 phones in China use batteries made by Amperex, which reportedly also is a main supplier of batteries for Apple's iPhone. 

Last week, Samsung recalled 1,858 Note 7 phones in China from a different batch that had been distributed before general sales began. The company said the two units involved in the reported fires were not from that batch. 

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UPDATES:

9:10 a.m.: This article was updated throughout with Samsung saying it has found no battery problem in China.

This article was originally published at 7:50 a.m.

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