Verizon CEO on Samsung Note 7 issues: 'I've never seen a recall like this'

Verizon CEO: We still see a real value in Yahoo
Verizon CEO: We still see a real value in Yahoo

As the major carriers yank them from shelves, Verizon's CEO said he's never seen a recall like the one for the Galaxy Note 7.

"This is by far the biggest concern I've seen in cellphones during my tenure," said Lowell McAdam. "I think [Samsung's] a little surprised the fix didn't fix things. So it's a major black eye for them. As I said to Tim Cook the other day, they've got pretty good karma, because they launched the iPhone 7 when they did."

McAdam spoke from the Internet Association's Virtuous Circle conference in Menlo Park, California, meant to gather "the most important stakeholders of the internet economy."

"I certainly, in however many years it's been now, have not seen a recall like this," McAdam said.

It comes after at least five reports have surfaced of Galaxy Note 7 phones overheating or catching fire, according to The Associated Press, despite a global recall of the handsets last month. A Verizon spokeswoman told Reuters that it may shift its marketing away from the Galaxy Note 7 phone heading into the holiday season.

"We recognize that carrier partners have stopped sales and exchanges of the Galaxy Note 7 in response to reports of heat damage issues, and we respect their decision," Samsung told CNBC. "Even though there are a limited number of reports, we want to reassure customers that we are taking every report seriously."

McAdam said he expects Samsung will get back on its feet, but reports of problems in the replacement device are "pretty well-substantiated."

"We'll give you a device of your choice versus another Note 7 — it's just not safe at this point in our view," McAdam said. "Note 7s are off the shelf at this point."

He said Verizon customers can turn their Galaxy Note 7 phones into Verizon in exchange for another device. So far, he's seen that most Android operating system customers are very loyal to it, and so Samsung's other phone, the Galaxy S7, and Google's Pixel, are both selling. Apple has also seen a small boost, he said, but people "aren't flocking away from Samsung."

Verizon is one of the only carriers that invests in testing laboratories for the devices it carries, McAdam said, and the batteries will get a lot of testing going forward. But McAdam said that at the end of the day, Verizon will still have to rely on smartphone makers.

"I have tremendous respect for them — if you look at where Samsung was 10 years ago. ... The landscape has changed dramatically and they have become a very high-quality company," McAdam said.

— Reporting by CNBC's Mike Newberg and Julia Boorstin.

Correction: McAdam spoke at the Internet Association's Virtuous Circle conference. A previous version misstated the name of the conference.