Jigar Mehta’s WebBlog

October 17, 2006

Sharp to join the Sony battery recall, Sony might lead itself to financial strain

Filed under: Uncategorized — jigarme @ 12:47 am

At least three companies are now indicating they may claim additional damages from Sony as part of the laptop battery recall that has rocked the Japanese electronics company, press reports indicate. Add to Sharp joining the recall (Fujitsu, IBM and Lenovo have already done so far) plus another expanding its own, and Sony’s problems continue to worsen.

Citing brand image and concerns over lost sales, Toshiba, Hitachi and Fujitsu all say they will review how the recall has affected them and may ask for further compensation above and beyond what they are receiving to pay for the replacement batteries.

While the only publicly released numbers on the cost of the recall from Sony claim that it would cost some $250 million, a number of recalls have been announced since then. Analysts expect the cost is now double what Sony has announced.

If all companies ask for compensation, the number could quickly approach $1 billion, putting a significant financial strain on Sony at a time when the company is attempting to launch its next-generation gaming console.

Sharp’s recall is fairly small, only affecting about 28,000 units, as it is a relatively small manufacturer of laptops. However a larger manufacturer, Fujitsu, has expanded its recall by 51,000 to a total of 338,000 laptops.

Altogether, almost 8 million Sony-manufactured batteries have now been recalled.

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