The massive recall of one of Samsung's flagship devices is an embarrassing setback for the world's biggest selling smartphone maker. The Note 7 was unveiled just a month ago, and big rival Apple is expected to show off its new smartphone next week.
Samsung said Friday it had found a problem with the battery in some of the phones and was halting sales. In the coming weeks it will offer customers a new product for free to replace all 2.5 million Galaxy Note 7s that have been sold.
It's unclear what owners of the phones should do now. The company said it will take about two weeks to prepare the recall, and the date new products will be available will vary by country. People worried about their batteries should contact their nearest Samsung service center, it added.
South Korean news agency Yonhap had previously reported that there have been five claims around the world of Note 7s catching fire while charging. Unverified photos posted on social media showed charred devices.
Samsung, a giant South Korean company, said it had been alerted to 35 claims of faulty phones worldwide. It said it had so far found 24 devices with problems for every million sold.
U.S. mobile networks sell the Galaxy Note 7 for at least $850. At a news conference, company executives declined to comment on exactly how much replacing all the devices would cost.
"It is a big amount that is heartbreaking," said Koh Dong-jin, president of Samsung's mobile communications business.
Samsung shares fell Thursday on reports of problems with the Galaxy Note 7 battery but closed 0.6% higher Friday before the recall was confirmed.
Samsung had the biggest share of the global smartphone market in the three months to June 30, according to research firm IDC. The South Korean company had 22%, ahead of Apple's 12%.
Samsung benefited from the popularity of the Galaxy S7, IDC said, and the Galaxy Note 7 was expected to keep that momentum going into the second half of the year.
The phone was well received by reviewers, drawing attention for several unique features such as an iris scanner, which allows users to unlock the phone with their eyes.