A Samsung Galaxy Note 7 is displayed Sept 8 at the headquarters of South Korean mobile carrier KT in South Korea. Samsung’s recall of 2.5 million Galaxy Note 7 phones after several dozen caught fire and exploded may stem from a subtle manufacturing error, but it highlights the challenge electronics makers face in packing ever more battery power into ever thinner phones, while rushing for faster release dates. (Ahn Young-joon/AP)

The U.S. government on Thursday moved to recall Samsung's highest-end smartphone — an unprecedented move for the smartphone industry and one that delivers a severe blow to Samsung in its pursuit to become the world's premium smartphone maker.

Samsung and the U.S. Consumer Product Safety Commission have issued an official recall for the Galaxy Note 7, Samsung's large-screen smartphone that has been known to burst into flames. This is the latest in a series of high-profile recalls involving lithium-ion batteries, which can be found in many different technologies. In recent years, the battery has been blamed for exploding hoverboards, dangerously overheating laptops, and the grounding of airplanes. But the Samsung incident may draw more attention due to the ubiquity of smartphones.

A formal recall allows the U.S. government to do several things, including making it illegal to sell the devices or use them on airplanes. Absent that formal process, several airlines have been announcing at the gate or before takeoff that the Note 7 cannot be charged or used on flights, citing the explosion risk.

This recall involved the Samsung Galaxy Note 7 smartphone sold before Sept. 15. U.S. officials said that 97 percent of the Note 7 phones sold in the United States have the type of batteries that have caused the fires.

"Samsung has received 92 reports of the batteries overheating in the U.S.," the agency said. These include 26 reports of burns and 55 reports of property damage — including fires in cars and a garage.

With the recall Note 7 owners have two options: They can either exchange their affected Note 7 phones for a new phone, or get a refund.

The formal decision comes two weeks after reports first surfaced that the smartphone could explode during normal use, while users charged their handsets.

Samsung initially announced at the end of August that it would delay shipments of its large-screen smartphone after scattered reports of explosions in the Korean media. The following week, the company announced its own voluntary replacement program but did not inform the CPSC about its decision before making that program public. That drew the ire of consumer advocates and others who said that Samsung's actions were not in line with U.S. protocol or laws governing recalls.

CPSC Chairman Elliot Kaye leveled some criticism at Samsung for not going through the standard process, saying that it was unnecessarily confusing for customers.

"As a general matter, it's not a recipe for a successful recall for a company to be going out on its own," Kaye said in a news conference.

Samsung's own guidance about what consumers should do with the phones has been confusing. Initially, when the company launched its own informal program, users were told to shut off the phones immediately and trade them into their mobile carriers or Samsung itself in exchange for new phones. Once the government agency got involved, the timelines for those exchanges were called into question, as the agency must approve all steps of a recall. Meanwhile, in South Korea, Samsung told customers there to use their phones to download software that would limit the charge on the Note 7's batteries — tacitly implying that it was fine to use the phones as long as they were not fully charged.

The confusion and bad press around the news comes as a major blow to Samsung, which had so far managed to contain the damage to its brand. The South Korean firm has clawed its way to becoming the world's largest smartphone manufacturer, and carefully cultivated its brand image to stand toe-to-toe with Apple as a high-end smartphone maker.

Airline authorities in the US and around the world are now warning passengers not to switch the phone on while on board. They've also advised against charging it and even checking it in the hold. (Reuters)

While critics had long-dismissed Samsung of simply being a "fast follower" adept at copying the innovations of others — a charge leveled at the Korean firm during a protracted legal battle with Apple — Samsung has emerged in the past two years not only as the world's largest smartphone maker but also among the most innovative. Its smartphones, particularly the Note line, have earned the distinction of being some of the most widely bought and best-loved devices on the market.

The Note 7's direct predecessor, the Note 5, is the top-rated phone in the 2016 American Consumer Satisfaction Index.

Good sales of the Samsung Galaxy S7 and S7 Edge helped push the company to its highest profits in two years, after several quarters of slowing growth in the smartphone market. That put Samsung in an extremely good position against Apple, its archrival in the smartphone world, which some pundits have seen as losing ground in the innovation realm against the firm it once accused of copying its designs.

In many ways, the Note 7 was to be Samsung's victory lap, and received rave reviews from the technology press before the reports about its faulty batteries began appearing around the world.

The recall is in conjunction with the governments in Mexico and Canada.