Samsung Electronics is recalling its flagship Galaxy Note 7 smartphone and says that battery problems were behind phones catching fire.
The decision follows reports in the US and South Korea of the phone "exploding" during or after charging.
The South Korean company said customers who had already bought the phone would be able to swap it for a new one.
Samsung said it had been difficult to work out which phones were affected among the 2.5 million Note 7s sold.
"There was a tiny problem in the manufacturing process, so it was very difficult to figure out,'' the president of Samsung's mobile business Koh Dong-jin told reporters.
"It will cost us so much it makes my heart ache. Nevertheless, the reason we made this decision is because what is most important is customer safety," he said.
The firm said it would take about two weeks to prepare replacement devices.
According to Samsung, the phone has been launched in 10 countries so far but with different companies supplying the batteries.
The recall comes just one week ahead of an expected presentation of a new iPhone model from its main rival Apple.
Mobile phone provider Two Degrees said it would replace all Note7s bought from them.
Customers would have the options of exchanging it, having an alternative device until the new model arrived, or a cash refund.
Over the past few days, several users have reported their phones catching fire or exploding while charging, and Samsung said it had confirmed 35 such cases.
A YouTube user uploaded a video under the name Ariel Gonzalez on 29 August of a Galaxy Note 7 with burnt rubber casing and damaged screen.
He said the handset "caught fire" shortly after he unplugged the official Samsung charger, less than a fortnight after purchasing it.
Further images of a burnt Galaxy Note 7 were uploaded to Kakao Story, a popular social media site in Korea, on 30 August.
A user wrote: "There was another explosion of the Galaxy Note 7. It was my friend's phone. A Samsung employee checked the site and he is currently in talks over the compensation with Samsung. You should use its original charger just in case and leave the phone far away from where you are while charging."
Customers offered refund or replacement
In a statement, the telco company Spark said they would stop selling the Note 7 model until further notice.
The chief executive of Spark New Zealand's mobile division, Jason Paris, said there had been no incidents in New Zealand so far.
"We've had a look online, as well as our customers have, and there seems to be a variety of things that are happening, in essence the battery unit is failing.
"There haven't been any instances of this happening to Spark customers, or in fact in New Zealand, but because of that Samsung have begun a voluntary recall of the product."
Mr Paris said Spark customers who had bought Note 7s should return them to a Spark store for a refund or replacement.
Mobile phone provider Two Degrees also said it would replace all Galaxy Note 7 smartphones bought from them.
Two Degrees said customers would have the options of exchanging their phone it, having an alternative device until the new model arrives, or a cash refund.
The phone was only launched on 19 August and has since then been generally well-received by critics and consumers.
The Galaxy Note 7 model is the latest of Samsung's series of so called phablets - smartphones with very large screens.
Samsung also added an iris scanner to the Note 7, which lets users unlock the phone by detecting patterns in the eyes.
In July, Samsung beat expectations with record earnings in the latest quarter with strong smartphone sales helping the firm post its best quarterly results in more than two years.
Samsung had predicted continued increase in demand for its smartphones and tablets in the second half of the year.
- BBC / RNZ