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Things can change quickly in the technology sector. Samsung, the world’s biggest producer of smartphones by market share, was surging as the Galaxy S7 flew off the shelves. In July it reported its most profitable quarter for two years, and in August its shares hit an all-time high. Its stock was closing the valuation gap with Apple, its closest rival and the world’s most valuable company, as concerns grew that the US technology giant was losing its cutting-edge in terms of mobile phone design and technology developments. Samsung’s latest phones are seen as having two big advantages over Apple’s: a much better battery performance and its innovative curved screens.
Then Samsung suffered a massive blow. In what is likely to prove one of the most costly recalls the technology industry has ever seen, the South Korean firm will replace all 2.5 million of its Galaxy Note 7 phones already shipped due to the risk of the batteries bursting into flames. It comes just weeks after the phone was launched to some of the best reviews for any Samsung phone.
Samsung’s strong share price rally has run out of steam