Sony Corp said on Tuesday that a recall of up to 9.6 million of its personal computer batteries was overwhelming its production capacity and warned it could lose some business to its rivals.
Besides Sony itself, major computer makers such as Dell Inc, Toshiba Corp and Apple Computer Inc are recalling Sony-made lithium-ion batteries, which in rare cases can overheat and catch fire. Sony Executive Deputy President Yutaka Nakagawa told a news conference that Sony's output capacity was not sufficient to supply enough new batteries to replace its customers' batteries while also meeting regular demand not related to the recall.
Nakagawa said Sony was in talks with PC makers about enlisting the help of other battery makers to meet demand. Asked about the likelihood that some of those PC makers could take their business elsewhere and permanently reduce their reliance on Sony batteries, he said: "We think there is a good chance for something like that to happen."
Such a move could be a boon for Sanyo Electric Co, the world's top maker of lithium-ion batteries in 2005, according to research firm J-Star Global. Sony ranked second while Matsushita Battery Industrial Co came in third.
Sony said it had no plans to quit its battery operations, which Morgan Stanley analyst Masahiro Ono estimated late last month would post sales of 180 billion yen ($1.5 billion) for the year to next March 31, or 2 percent of the company's overall revenues.
Sony does not disclose the size of its battery operations. "The battery operation is a very important business for us. We have no intention of quitting it or scaling it down," Nakagawa said. "I would like to take this opportunity to apologise for causing worries over safety of lithium-ion batteries."
The recalls, coupled with a delay in the European launch of the PlayStation 3 game console due to a production glitch, shook consumer confidence in Sony's technological competitiveness. Hit by the mounting recall costs and a widening loss at its game division, Sony last week slashed its full-year operating profit outlook by 62 percent.
The Tokyo-based electronics and entertainment conglomerate has set aside 51 billion yen for costs related to the recall. It said on Tuesday it will recall about 250,000 batteries used in its Vaio notebook computers world-wide. It previously said it planned to recall 90,000 batteries in Japan and China, but did not specify the number to be recalled in other markets.
The announcement was followed by comments by Toshiba, the world's third-largest notebook PC maker, that it now expects to recall 870,000 laptop computer batteries made by Sony, up from its previous estimate of 830,000 units. Sony said, however, that the new figure from Toshiba was included in its projection of a global recall of up to 9.6 million batteries.
Comments
Comments are closed.