[IP] (BN ) Apple Recalls 1.8 Million Batteries, Citing Injuries
Begin forwarded message:
From: "CONNIE GUGLIELMO, BLOOMBERG/ SAN FRANC"
<cguglielmo1@xxxxxxxxxxxxx>
Date: August 24, 2006 3:05:11 PM EDT
To: dave@xxxxxxxxxx
Subject: (BN ) Apple Recalls 1.8 Million Batteries, Citing Injuries
Our latest take on story. Note: Apple said recall doesn't affect Intel
notebooks.
Apple Recalls 1.8 Million Batteries, Citing Injuries (Update3)
2006-08-24 15:04 (New York)
(Adds Sony comment in second paragraph)
By Connie Guglielmo and Ian King
Aug. 24 (Bloomberg) -- Apple Computer Inc. is recalling 1.8
million Sony Corp. batteries used in its Macintosh notebooks, a
week after Dell Inc. instituted a similar recall. The moves may
cost more than $250 million, Sony said.
The batteries were used in Mac iBook and PowerBook computers
sold between October 2003 and August 2006, Cupertino, California-
based Apple said. Sony doesn't anticipate any further recalls,
the company said in a statement today.
``The batteries pose a fire hazard, and we want consumers to
take this recall seriously,'' said Scott Wolfson, a spokesman for
the U.S. Consumer Product Safety Commission, based in Bethesda,
Maryland. ``We want them to take the batteries out of the laptops
immediately.''
Problems with Sony batteries led Dell, the world's largest
personal-computer maker, to initiate the biggest recall in
consumer-electronics history. The decision by Apple is the second-
largest recall ever after Dell and brings the number of affected
notebooks to almost 6 million. Apple discovered nine incidents of
batteries overheating, with two causing minor burns to Mac users.
Battery replacements for Dell and Apple notebooks will cost
Sony 20 billion yen to 30 billion yen ($170 million to $257
million), the Tokyo-based company said in a statement. Apple
doesn't expect the recall to have a ``material financial
effect,'' company spokesman Steve Dowling said in an interview.
`Sony Responsible'
The recall doesn't affect notebooks with Intel Corp. chips
that were released this year, Dowling said.
For Apple, ``it's an inconvenience but financially it's a
non-event because Sony is responsible,'' Gene Munster, an analyst
with Piper Jaffray Cos. based in Minneapolis. ``The key is that
it doesn't impact Apple's Intel notebooks.''
Shipments of Macs are at their highest level in five years,
fueled by demand for faster laptop models powered by Intel chips.
Dowling declined to say how many notebooks Apple sold during the
affected time period for the recall. Apple has shipped more than
1 million machines in each of the past seven quarters.
Notebook shipments at Apple rose 61 percent in the quarter
ended July 1 and accounted for 62 percent of Mac revenue.
Shares of Apple, also the maker of the iPod music player,
rose 59 cents to $67.90 at 3 p.m. New York time in Nasdaq Stock
Market composite trading. They had fallen 6.4 percent this year
before today. Sony American depositary receipts fell $1.27, or
2.9 percent, to $43.15 in New York Stock Exchange trading.
Affected Computers
The safety commission said the recall affects 1.1 million
Mac notebooks sold in the U.S. and 700,000 sold overseas. The
machines were purchased at Apple's stores, through the company's
Web site and at authorized resellers.
Affected notebooks were sold for $900 to $2,300, and some
batteries were sold separately for about $130.
The units were assembled in Japan, Taiwan and China and
contain Sony's lithium-ion batteries. Sony is the world's second-
largest maker of consumer electronics behind Matsushita Electric
Industrial Co.
The commission announced on Aug. 17 it was reviewing
notebook batteries made by Sony three days after Round Rock,
Texas-based Dell recalled 4.1 million batteries on concern that
some may burst into flames. The batteries were made in Japan and
assembled in China by Sony workers.
Dell told the safety commission that it learned of six cases
since December in the U.S. of notebooks overheating or bursting
into flames because of a problem in the fuel cells of the widely
used lithium-ion batteries. No injuries were reported, Dell said.
Hewlett-Packard Co., the world's second-largest PC maker,
and Gateway Inc., the third-largest PC maker in the U.S., have
said their systems are not at risk.
Battery Replacement
Problems arise ``on rare occasions'' when short circuits
occur within battery cells, according to the Sony statement. A
short circuit should cause the battery to shut down. ``Under
certain rare conditions'' it may lead to overheating and flames.
Apple's recall comes after the company on July 28 announced
a replacement program for some Mac Book Pro notebook batteries.
The machines have 15-inch screens and were sold between February
and May. Apple instituted the recall citing ``performance
issues'' with the rechargeable batteries and said the affected
batteries don't pose a safety risk, according to company
spokesman Dowling. He declined to say how many of those machines
were affected and who manufactured the batteries.
Today's recall affects certain models of the iBook with 12-
inch displays and PowerBook notebooks with 15-inch screens.
Customers will receive a free battery replacement, Dowling said.
Instructions will be posted later today at
http://support.apple.com/batteryexchange.
--Editor: Sondag
Story illustration: For Apple's sales by product type, see
{AAPL US <EQUITY> DES 6 <GO>}. For Apple news,
see {AAPL US <Equity> CN <GO>}.
To contact the reporters on this story:
Connie Guglielmo in San Francisco at (1) (415) 743-3582 or
cguglielmo1@xxxxxxxxxxxxx;
Ian King in San Francisco at (1) (415) 743-3548 or
ianking@xxxxxxxxxxxxxx
To contact the editor responsible for this story:
Emma Moody at (1) (212) 617-3504 or
emoody@xxxxxxxxxxxxxx
[TAGINFO]
AAPL US <Equity> CN
DELL US <Equity> CN
6758 JP <Equity> CN
NI TEC
NI COS
NI CPR
NI CONS
NI JAPAN
NI TX
NI CA
NI US
NI RECALL
NI ELE
NI ELQ
#<460457.732785.1.0.7.4.25>#
-0- Aug/24/2006 19:04 GMT
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