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Tuesday, October 17, 2006
Sony to Recall Own Batteries

Sony said on Tuesday it is reviewing its full-year earnings outlook in light of recalls of Sony-made batteries by PC makers and a cut in the price of its upcoming video game console, PlayStation 3.

Sony also said it would recall 60,000 of its own laptop computer batteries in Japan, 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," Sony 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.

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, Apple, Lenovo Group Ltd., Toshiba and some other PC makers, Sony said it would recall 60,000 of its own batteries in Japan.

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

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.

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