Sony Battery Woes Deepen

The announcements from Toshiba and Fujitsu came after the Tokyo market closed. Sony shares had fallen 0.8 percent to 4,780 yen, underperforming a 0.64 percent rise in the Nikkei average.

A Toshiba spokesman said the company did not think there were any safety issues regarding its PCs using Sony-made batteries, but it would recall them anyway to alleviate customer concerns. He added that Toshiba is not likely to pick up the tab for the recall.

Sony said the costs of the replacement programme were not clear at present, because details such as the duration of the programme and the number of batteries to be replaced have not yet been formally established.

Hitachi Ltd. said the electronics conglomerate has not decided whether to participate in Sony's replacement programme and ask its customers to exchange batteries.

Following the Dell and Apple announcements in August, Sony has said the two recalls would cost it between 20 billion yen and 30 billion yen ($170 million-$255 million).

The higher figure equals about one-fourth of Sony's net profit for the current business year to March.

LIMITED IMPACT SEEN

Analysts said the IBM/Lenovo recall and Sony's replacement programme are likely to have limited impact on its earnings and the long-term prospects of its battery business.

"The 30 billion yen estimate should have been a conservative one. I don't think these additional factors would raise the cost far away from that estimate," Morgan Stanley analyst Masahiro Ono said before the announcements by Toshiba and Fujitsu.

"In a longer term, Sony will remain one of the top-class battery suppliers, and it is unrealistic that PC makers halt procurement from Sony."