Sony, Dell to Take Financial Hit in Laptop Recall

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Sony's market price will probably weather the up to $225 million hit it might take in the wake of a massive laptop battery recall by Dell that's grabbing headlines this morning.


That's the opinion of a Japanese investment firm, as reported by vnunet this morning. The $225 million, admittedly a worst-case estimate, would constitute 14 percent of Sony's operating profits for the year, but would be seen as a one-off expense -- unless research into why Sony's laptop batteries are catching on fire uncovers deeper problems in design or manufacture, says Nomura Securities in the vnunet report.


In all, Dell is recalling 4.1 million laptops that include the Sony-manufactured batteries. The recall is the third one related to batteries for Dell in the last five years; other laptop manufacturers say they are either unaffected (HP, a major provider of business laptops, doesn't use Sony batteries) or that they are investigating the impact on their products.


Sony has said it will help pay for the recall, but exactly how Dell and Sony will share the expense has not been publicized. The actual cost to Sony may well not reach that $225 million estimate, but there's always possible liability when it comes to consumer products catching on fire.


Dell laptop users can get more info on the recall at this site set up by the manufacturer.