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Apple Battery recalls to deal blow to Sony's nascent recovery
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Sony Corp. is expected to be hit hard by large-scale recalls of its batteries, just as the electronics giant was starting to show signs of an earnings recovery.
Apple Computer Inc. on Thursday announced a recall of 1.8 million units of Sony-made battery cells for its personal computers, following a similar recall of 4.1 million units announced by Dell Inc. last week.
Sony puts its estimated recall costs at 20 billion to 30 billion yen. In addition to the heavy financial burden, consumer confidence in the quality of Sony's products may be hurt.
For April-June, Sony registered a group net profit of 32.3 billion yen, its first quarterly net profit in two years. The firm expects a net profit of 130 billion yen for the full year ending in March 2007.
A Sony official said the firm will size up the full impact of the massive recalls after a thorough examination of the company's business situation.
Depending on the course of events, however, Sony may see its estimated costs increase.
Sony blames both battery cells and computers for causing burns and other problems that led to the recalls. Sony has not explained clearly how it came up with its estimate, which is believed to be based on the assumption that Dell and Apple will put up part of the costs of recalling the affected products.
Meanwhile, the two U.S. firms reject Sony's claims and are poised to ask Sony to shoulder most of the total costs. (Jiji Press)
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