Sony shares drop following laptop fire fears

17-08-2006

Electronic giant Sony has seen its share price drop by almost two per cent following the decision by computer manufacturer Dell to recall laptop batteries supplied by the company, amid fears of a fire risk.

Japanese-based company Sony saw the value of its shares fall by 1.9 per cent to 5,110 yen (£23.25) in early afternoon trading on the Tokyo stock market today.

Dell's decision to recall the lithium-ion batteries manufactured by the Sony Energy Devices Corporation in Fukushima, north of Tokyo, comes as a major embarrassment for Sony. The company is currently trying to overhaul its electronics operations following a gradual decline in its share price over the past year under new Welsh-born chief executive Howard Stringer.

Sony said today that it was fully supporting the recall of the problem batteries, which were placed in laptops shipped by Dell between April 2004 and July 2006.

Dell, the world's largest computer manufacturer, announced yesterday that it was recalling over 4.1 million computer batteries used in its notebooks after warning that in "rare cases" a defect could cause them to overheat and even catch fire.

The action taken by Dell followed the publication of photographs showing one of the company's laptops bursting into flames during a conference in Osaka, Japan. Similar incidents were subsequently reported across the world.

Dell said that it had been made aware of six instances, since December, when the Sony-made batteries had over-heated or caught fire, although there have been no reported injuries as a result.

The company, which is recalling batteries used in later models of its Latitude, Inspiron, XTS and precision mobile workstation notebooks, is offering customers free replacements and had received some 77,000 orders from affected consumers by late yesterday.

Commenting on the recall, Sony spokesman Takashi Uehara said that the company were "proceeding immediately" to support Dell's action, but was still calculating how much the move would cost.

He explained that in some cases the Sony batteries could overheat or even catch fire as a result of metal particles getting in to them during production.

Batteries powering Sony's own laptops are understood to be safe as the problems are only thought to occur with certain types of computer, Mr Uehara added.

US consumer safety officials have confirmed that they are reviewing the risk of fire across all makes of laptop which use Sony's lithium-ion batteries.

"We are looking at the complete scope of the batteries made by Sony to ensure that no other consumers are in harm's way," said Scott Wolfson, a spokesman for the US Consumer Product Safety Commission.


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