Sony to face huge bill from laptop makers

[T2k]

http://www.theinquirer.net/default.aspx?article=35121

Sony faces huge bill from notebook makers

Expensive little numbers

By INQUIRER staff: Monday 16 October 2006, 14:41
TOSHIBA, Fujitsu and Hitachi are likely to ask Sony to foot the bill for a recall they've made of batteries used in their notebooks.

The WSJ estimates that all three notebook makers have issued recalls on over one million Sony batteries.

Other notebook firms which have recalled batteries, including Dell and Apple, have not made it clear whether they're seeking compensation from Sony.

But Sony originally placed the cost to it as around $250 millions. That figure is likely to climb. µ

LOL, 'over 1 million' each only? Tsk tsk tsk, I wonder what's in the background of WSJ's latest sh*t-spinning campaign - some Sony interests perhaps?

Dell alone called back more than 4 million batteries. See: http://1010wins.com/pages/94334.php?contentType=4&contentId=214678

Apple originally recalled 1.1 million batteries: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06245.html - which later became 1.8 million: http://www.msnbc.msn.com/id/15154159/

Toshiba recalled 830 000 batteries, IBM-Lenovo recalled almost 600 000 batteries.
Fujitsu and Hitachi together recalled roughly some half million batteries together.

The current numbers are somewhere 7 million batteries - does WSJ seriously think for example Dell won't be seeking reimbursement from Sony for 4.2 million battery replacement?

Even if lot of costumers won't use the replacement offer, it'll be still at least $200M minus for Sony... so much for stock rebounding...

 

[T2k]

It seems the situation is eve more dire than I thought:

http://www.dailytech.com/article.aspx?newsid=4564

Battery Recalls to Cause Global Shortages
Tuan Nguyen (Blog) - October 16, 2006 3:56 PM

And prices to rise

Over the last several months, a number of top tier companies have been asking customers to return batteries for replacement due to safety concerns. If you have been following the new on DailyTech, a total of roughly 8 million batteries have been recalled worldwide, all of which are manufactured by Sony.

However, there is good news and now there is bad news. The good news is that consumers are being protected from hazards that could cause severe damages or even life threatening situations. Some batteries were found to set laptops on fire. Fortunately, companies were quick to take action and batteries were swapped rather quickly. The bad news is that so many batteries were recalled and not enough were replaced, causing a global shortage of batteries.

Analysts are saying that battery supply is currently at critically low levels on a global scale. Despite being the world's largest lithium cell manufacturer, Sanyo does not have the capacity to supply replacement orders. Samsung SDI Co. also manufactures lithium cells but it too is running low on supply. Nexcell Battery, a Taiwan-based battery manufacturer that produces batteries from cells supplied by Sanyo and Sony said that cells are now very difficult to come by. Eric Lai, manager at Nexcell Battery said "if we ask for small amounts, we might be able to get supply, but if we order large amounts of more than 2000 cells then you can forget about it."

Because of the global shortage, battery prices are also on the rise. According to analysts, prices have jumped as much as 15 percent. IBM, Apple, Lenovo, Hitachi, Toshiba, Dell, Fujitsu, Sharp and many other companies worldwide announced recalls over the last several months. In fact, it's reported that Sony is in the process of destroying over 43 million cells as part of the overall recall. This is as much as 10.8 million batteries said Eric Yu, manager at ETI Pack in Taiwan.

Sony itself has not revealed publicly how many companies in total have recalled batteries that used its cells, and the company is also tight lipped about how much money this recall is costing. So far however, Sony has budgeted at least $251 million for the recall project. Sony now faces stiffer competition from rivals. LG Chem Ltd., South Korea's largest battery manufacturer gained several new customers that were previously ordering from Sony. Celxpert Energy Corp., a supplier for Acer and HP said "we originally bought 30 percent of our battery cells from Sony but have lowered that to almost zero because of quality concerns."

 

[JamesJ]

hmmmm wonder if we can link this to joesp's thread about how well sony is doing and how their stock is increasing!

 

[mikley28]

hmmmm wonder if we can link this to joesp's thread about how well sony is doing and how their stock is increasing!

The Sony Minister of Misinformation would deny it/

 

[T2k]

And the bad news are still coming...

Sony to recall own batteries

By Kiyoshi Takenaka Tue Oct 17, 3:58 AM ET

TOKYO (Reuters) - Sony Corp. (6758.T) said on Tuesday it may change its full-year earnings forecast because of costly recalls of its batteries and a price cut for its PlayStation 3 video game console.


Sony also said it would recall 90,000 of its Vaio brand laptop computer batteries in Japan and China, adding its name to the list of PC vendors recalling a total of about 8 million Sony batteries, which the company has said can on rare occasions overheat and catch fire.

"We are in the process of determining whether a revision to our annual earnings outlook is necessary, taking into account various factors that could affect our group earnings," the electronics and entertainment conglomerate said on its Web site.

Besides the recalls and the PS3 price cut, factors to be considered include fluctuations in foreign exchange rates and the performance of its electronics and entertainment businesses, Sony said.

Shares in Sony ended down 1.8 percent at 4,790 yen, underperforming the Tokyo stock market's electrical machinery index (.IELEC.T) which dipped 0.33 percent.

Sony said in July that it expected its group operating profit to come in at 130 billion yen ($1.1 billion) in the year to March, down 43 percent year-on-year. That compares with the consensus for a 160.9 billion yen profit in a poll of 20 analysts by Reuters Estimates.

Some analysts, however, take a more cautious view on Sony's earnings this year.

Morgan Stanley expects Sony to post an operating profit of 54.3 billion yen for the current business year.

For the following year starting April 2007, it expects Sony's operating profit to bounce up to 375.9 billion yen, driven by growing sales of game software for PS3 and robust revenues at its movie division.

Sony, which will launch the latest version of its blockbuster console on November 11 in Japan, said last month it would sell a version of PS3 with a 20-gigabyte hard disk drive for 49,980 yen ($420), down from the previously announced 62,790 yen.

It is not unusual for video game makers to incur substantial losses at the initial stage of a console launch. They often recoup the losses later from lucrative software sales.

Following Dell Inc. (NasdaqELL - news), Apple Computer Inc. (Nasdaq:AAPL - news), Lenovo Group Ltd. (0992.HK), Toshiba Corp. (6502.T) and some other PC makers, Sony said it would recall 60,000 of its own batteries in Japan and 30,000 units in mainland China.

The number of batteries it will recall in other markets is not clear at the moment, it said.

Sony shares fell over 8 percent since Dell first announce the recall in August, while the electrical machinery subindex rose 6.4 percent.

The Nihon Keizai Shimbun business daily said on Tuesday the electronics maker would likely recall a total of 300,000 batteries, but Sony spokesman Kei Sakaguchi said that estimate was based on speculation.

Sony's recall troubles seemed to increase on Monday after Toshiba said it might seek compensation from Sony for possible damage to its brand image and sales from the battery recall.

Sony said in August that recalls by Dell and Apple would cost it between 20 billion yen and 30 billion yen, but now it is expected to face an even heavier financial burden with the additional recalls.

In other words US and EU Sony recalls are still to be announced...

 

[T2k]

Sharp asks laptop owners to return 28,000 batteries

Sharp has become the latest laptop maker to ask its customers to return Sony-made notebook batteries. Its recall of some 28,000 power packs came as Fujitsu increased the size of its own battery recall by a further 51,000 units.

Sharp's recall focuses on its home market of Japan. Fujitsu's recall is worldwide in scope.

Sharp said seven of its machines were affected by the recall - the PC-MR40J, PC-MR50H, PC-MR60HS, PC-MR80H, PC-MR80HU, PC-MR80J and PC-MR8BH7 - and the company's CE-BL44 battery pack.

Like Fujitsu, Sharp said it was taking advantage of Sony's own voluntary battery recall programme, initiated in September and which only extends to laptop vendors. The Japanese notebook maker was quick to claim it had had no reports of its products overheating and catching fire as has been the case with some Dell and Apple units, and possibly other vendors' machines. ®

http://www.reghardware.co.uk/2006/10/16/sharp_battery_recall/

 

[hpman247]

hmmmm wonder if we can link this to joesp's thread about how well sony is doing and how their stock is increasing!

This is the world of the stock market you see. Opportunities are takes as soon as they are known. Also known as a Efficient Market I believe. Two days ago Sony stock did look like it was doing well. EVEN MICKLEY didn't deny it saying that "Besides If you go look at the earnings report and the investor conference call it says Sony Ericsson had a record quarter." So is it really necessary to so to put this in the PS3 Momentum thread when even those of you in the thread didn't disagree AT THAT TIME that sony stock was indeed rising. Most of you just didnt take it as due to the release of the PS3, but no one could deny it then.

 

[T2k]

http://www.engadget.com/2006/10/19/sony-battery-recall-approaches-10-million-costs-mounting/

Over 9.6M batteries total... staggering numbers...

 

[JamesJ]

This is the world of the stock market you see. Opportunities are takes as soon as they are known. Also known as a Efficient Market I believe. Two days ago Sony stock did look like it was doing well. EVEN MICKLEY didn't deny it saying that "Besides If you go look at the earnings report and the investor conference call it says Sony Ericsson had a record quarter." So is it really necessary to so to put this in the PS3 Momentum thread when even those of you in the thread didn't disagree AT THAT TIME that sony stock was indeed rising. Most of you just didnt take it as due to the release of the PS3, but no one could deny it then.

YES lets attach for one of TWO reasons...A. Sony is more of a company then just PS3, if their stock was doing good, it wasnt because of the PS3, because at this time, it isnt released. Also yes they did do well in preorders (well sorta, thats another thread) so it could have NUDGED them a bit. B. It is a up and down world in Stocks, I would not post everytime Microsoft had a good day at the stock market and say its all because of the 360, people need to learn that, and I am tired of people posting threads with misinformation, trying to make it seem one way or the other.

 

[T2k]

This is the world of the stock market you see. Opportunities are takes as soon as they are known. Also known as a Efficient Market I believe. Two days ago Sony stock did look like it was doing well. EVEN MICKLEY didn't deny it saying that "Besides If you go look at the earnings report and the investor conference call it says Sony Ericsson had a record quarter." So is it really necessary to so to put this in the PS3 Momentum thread when even those of you in the thread didn't disagree AT THAT TIME that sony stock was indeed rising. Most of you just didnt take it as due to the release of the PS3, but no one could deny it then.

... which had NOTHING to do with any kind of MOMENTUM, right. WE never said "no, it did not rise" but we said it's nowhere a momentum. Look at their yearly charts - you have to be a totally clueless idiot to think it's a momentum...

 

[T2k]

Gateway recalls 35,000 batteries:

http://www.notebookreview.com/default.asp?newsID=3301