Meanwhile, AT&T said: "We're no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents." It advised customers to exchange them for other devices.

Manufacturing error

Samsung said in a statement last month that the issue of overheating was caused by a "rare" manufacturing error that resulted in the battery's "anode-to-cathode [negative and positive electrodes]" coming into contact.

But last week, a domestic flight in the US was evacuated after a replacement Note 7 started emitting smoke in the cabin. And a man in Kentucky reportedly woke up to a bedroom full of smoke from a replaced Note 7.

In an update on Monday, Samsung said it understood the concerns of carriers and consumers about the newly released replacement Note 7 devices.

"We continue to move quickly to investigate the reported case to determine the cause and will share findings as soon as possible," Samsung said.

"If we conclude a product safety issue exists, we will work with the CPSC (US Consumer Product Safety Commission) to take immediate steps to address the situation."

Shares in Samsung Electronics closed down 1.5% in Seoul.

Brand damage

Eric Schiffer, a brand strategy expert at Reputation Management Consultants, said the company needed to take action to limit the harm to its image.

"If the Note 7 is allowed to continue, it could lead to the single greatest act of brand self-destruction in the history of modern technology," he said.

"Samsung needs to take a giant writedown and cast the Note 7 to the engineering hall of shame next to the Ford Pinto."

In 1977, the Pinto was the subject of a then-record US recall to address safety concerns.