Sony has
confirmed that it will lose up to a quarter of its profit this year as it pays
for a huge recall of six million potentially explosive
Dell and
Apple
notebook PC batteries.
The company revealed in a statement that it currently estimates the cost of
the recall at between $175m and $265m,
matching
predictions supplied exclusively to
vnunet.com by
Japan-based analysts last week.
According to Sony's estimates, the cost of replacing the batteries will drain
between 16 and 24 per cent of its predicted $1.09bn operating profit for the
financial year.
Dell announced a recall of
four
million Sony laptop batteries on 15 August, and Apple recalled
1.8
million batteries on 25 August.
Sony announced that it has changed its battery manufacturing processes to
address the issue and improve safety.
The elctronics giant explained how the faulty lithium-ion battery cells could
sometimes short circuit, pouring out their stored energy in a runaway reaction
which can cause overheating and fire.
"On rare occasions, microscopic metal particles in the recalled battery cells
may come into contact with other parts of the battery cell, leading to a short
circuit within the cell," said the
Sony
statement.
"Typically, a battery pack will simply power off when a cell short circuit
occurs. However, under certain rare conditions, an internal short circuit may
lead to cell overheating and potentially flames.
"The potential for this to occur can be affected by variations in the system
configurations found in different notebook computers.
"Sony has introduced a number of additional safeguards into its battery
manufacturing process to address this condition and to provide a greater level
of safety and security."
Sony's most recent statement refers to batteries used in products from Dell
and Apple. It is not clear from the statement whether the affected batteries
have also been used in its own or other manufacturers' laptop PCs.
However, the company stated that it did not anticipate any further recalls of
battery packs using "these particular battery cells".
Analysts from
Nomura
Securities in Japan believe that, despite the size of the loss, its one-off
nature makes it little more than a speed bump for Sony.
The company's latest statements appear to dampen speculation from analysts
that the battery manufacturing problems might be more widespread and harder to
resolve, leading to a continuing impact on future profits.
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