Owners of the Galaxy Note 7 in South Korea on Thursday started getting a refund or swapping their phones for another smartphone, two days after Samsung Electronics Co. decided to discontinue the device over safety concerns.

Consumers who have a Note 7 in their possession must visit stores where they bought the devices to get a refund or exchange.

The refunds and exchanges in South Korea will be completed by the end of this year, according to local mobile carriers.

Buyers of the Note 7 had received free gifts, including Gear Fit 2, but they do not need to return the gifts.

Consumers can exchange their Note 7s with smartphones made by other manufacturers.

If a customer decides to swap a Note 7 for another Samsung smartphone, such as the Galaxy S7 or the Galaxy S7 Edge, he or she will be offered a mobile gift card worth 30,000 won ($26.60).

Meanwhile, a market researcher expected the permanent end of production of the Note 7 to create an opening for rival smartphone makers, but it will not affect rising component prices.

"Samsung's stunning announcement to stop all sales and exchanges of Galaxy Note 7 is expected to cause noticeable changes in shipments of major smartphone brands," said the market researcher TrendForce.

"In the large-size smartphone market, Samsung's competitors such as Apple, Huawei, Vivo and OPPO are expected to snatch up the demand that was initially going to Note 7," it said.

"On the other hand, the discontinuation of Note 7 sales will not dampen the upward price trends for key smartphone components, including DRAM, NAND Flash and AMOLED panels," it said.

TrendForce said, "In the long run, the fallout from the Note 7 incident will have a significant impact on Samsung's overall bottom line."

To stay profitable, TrendForce said Samsung "may increase the prices of its memory and panel components, which have a dominant market share worldwide."  (Yonhap)