U.S. consumer safety officials said on Tuesday they are reviewing all Sony-made lithium-ion batteries in laptop computers for fire hazards after Dell Inc. (DELL) announced the largest electronics recall in the United States.
Dell, the No. 1 maker of personal computers, on Monday said it is recalling 4.1 million notebook batteries made by Sony Corp. (SNE) because they could overheat and catch fire. A battery of the type involved in the recall was in a Dell laptop that erupted in flames in Japan earlier this year.
"We are looking at the complete scope of the batteries made by Sony to ensure that no other consumers are in harm's way," U.S. Consumer Product Safety Commission spokesman Scott Wolfson said. "We recognize that the batteries manufactured by Sony are not unique to just the Dell notebook computers."
Such batteries are also used in a wide array of gadgets, including cell phones, digital cameras, camcorders and music players, and Wolfson added that the safety commission is encouraging companies and consumers to report potential defects in other devices using the battery cells but the focus for now was on laptops.
Dell's recall covers Sony laptop batteries sold from April 2004 through July 18 of this year, including 2.7 million units in the United States.
While no injuries have been tied to these products, Dell said it has received six reports of batteries overheating since December, causing damage to furniture and other items.
"It's probably not Dell-specific," said the president of market researcher Endpoint Technologies Associates, Roger Kay. "If they have the Sony cell, specifically the cell made between April 2004 and June 2006, they have the problem."
He estimated the recall could cost $200 million to $300 million, depending on how many customers participate.
Dell said it expected no "material" financial impact from the recall, while Sony said its cost from the recall has not yet been determined.
A Sony spokesman in Tokyo said on Tuesday the overheating problem is believed to be specific to batteries supplied to Dell, but recall decisions are up to each maker.
Hewlett-Packard, the world's No. 2 PC maker, said it was not affected by the recall.
"It's a Dell issue," spokesman Ryan Donovan said.
Apple Computer Inc. on Monday said it was looking into the matter.
A spokesman for Lenovo Group Ltd., the third-largest PC maker by market share, said the company was not recalling any batteries "at this time."
"While no make or model of battery is 100 percent immune from failures or overheating, to date we have not seen any unusual pattern of problems in our notebooks," said the spokesman, Bob Page.
Dell may pay a bigger cost in lost customers as its image takes a beating, Cindy Shaw, an analyst at Moors & Cabot Capital Markets, said in a research note.
"We also believe recall news could sway consumer purchase decisions away from Dell as back-to-school season gets under way ahead of the important holiday season," wrote Shaw, who has a "sell" rating on Dell shares.
The recall comes as Dell is investing $100 million and hiring 2,000 people this year to improve customer service after it was hit with complaints of inferior after-sales service.
Dell said consumers who bought its notebooks in the recall period should remove the batteries and contact Dell for a replacement.
Customers can continue using an AC adapter and power cord with the computers, Dell said.