Sony Corp. is cooperating fully with personal computer maker Dell Inc.’s recall of 4.1 million notebook computer batteries supplied by Sony, but it does not know how much the recall will cost, a spokesman said Wednesday.
On the news of the recall, shares in the electronics and entertainment giant, which had been rising over the past year since Howard Stringer took over as CEO, fell Wednesday 1.15 percent to 5,150 yen on the Tokyo Stock Exchange.
The recall is the largest for a consumer electronics product involving the U.S. Consumer Products Safety Commission and a major embarrassment for Sony as it tries to overhaul its electronics operations under Stringer, the first foreigner to head the company.
The defective lithium-ion batteries used in the Dell laptops are made by Sony Energy Devices Corp., based in Koriyama, Fukushima Prefecture, said Sony spokesman Takashi Uehara.
Particles of metal got into some of the batteries during production, which could cause overheating or fire, he said.
Batteries powering Sony’s Vaio laptops are not affected by the problem, which happens only when the batteries are used with some (non-Sony) computers, he said.
“We are moving immediately to support this recall,” Uehara said, adding that Sony was still trying to determine the cost of the recall and will announce it as soon as possible.
Goldman Sachs Inc. estimates the value of the batteries at 39.4 billion yen, which is a rough indicator of the cost of the recall.
David Gibson, senior analyst at Macquarie Research Equities, said the recall will likely cost Sony somewhere between 25 billion yen and 35 billion yen, assuming a cost of $50 apiece to replace the batteries, although not all customers will ask for replacements.
Gibson told Dow Jones Newswires the damage to Sony is likely to be limited because the batteries represent only a small fraction of Sony’s business.
Sony, based in Tokyo, recorded a 32.3 billion yen profit during the fiscal first quarter on the back of strong sales of flat-screen TVs and digital cameras. The figures were a big improvement from the 7.3 billion yen loss reported for the same period last year.
Quarterly sales jumped 11 percent to 1.74 trillion yen from 1.57 trillion yen a year ago.
Lithium-ion batteries are rechargeable power cells used in laptops, digital cameras, music players, cell phones and other gadgets. Dell, based in Round Rock, Texas, announced the recall Monday night. Dell is the world’s largest maker of PCs.
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