Battery Replacement Could Cost Sony $431M
By Colleen Taylor -- EDN, October 26, 2006
Sony Corp. has announced details of the replacement program it is offering for notebook computer battery packs containing the same types of defective Sony-manufactured battery cells that spurred the Dell, Apple Computer and Lenovo recalls.
The lithium-ion batteries involved in the recalls have been found to cause overheating in some instances, posing a fire hazard to customers. Sony's new program will be implemented in cooperation with the U.S. Consumer Product Safety Commission and other regulatory agencies worldwide.
Sony will certainly pay for the design blunder. The company said that a total of 9.6 million battery packs could potentially be covered by its new program, which could set Sony back as much as $431 million (51 billion Japanese yen).
The program announced this week affects battery packs in specific notebook computers containing certain 2.4 Ampere/hour and 2.6 Ampere/hour battery cells manufactured by Sony from August 2003 to February 2006. It covers some 3.5 million units, not including packs previously recalled by Dell, Apple Computer and Lenovo.
Specific replacement programs' starting periods and procedures for consumers have been or soon will be announced by each of the participating PC manufacturers, according to Sony. In turn, Sony said it will dispose of the returned battery packs collected by the PC manufacturers.
"For those customers and PC users who may have been affected by the recent issues involving Sony-manufactured batteries, we regret any inconvenience or concern this may have caused," Yutaka Nakagawa, Sony's executive deputy president, said in a statement. "We are confident that our voluntary global battery replacement program will address any remaining concerns or needs of our customers and consumers."
The company's bottom line has not been immune to the recent battery troubles. Last week, Sony downgraded its fiscal year forecast, now projecting operating profits at $422 million, down 62 percent from its July outlook. The company's net income outlook was also lowered, down 38 percent from its July forecast to $67 billion.
