Nokia To Replace 46M Mobile-Phone Batteries
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Nokia Oyj offered to replace as many as 46 million mobile-phone batteries made by Matsushita Electric Industrial Co. as some may overheat, in what would be the largest voluntary consumer electronics recall.
Nokia, the world’s biggest mobile-phone maker, said there were about 100 cases of overheating, with no reports of serious injury or damage to property. The affected Nokia-branded BL-5C batteries were made by Matsushita Battery Industrial Co. from December 2005 to November 2006, Espoo, Finland-based Nokia said in a statement yesterday.
The latest incident follows a series of recalls in the past year that has drawn attention to quality at Japan’s electronics makers. In August 2006, Tokyo-based Sony Corp. began replacing 9.6 million notebook computer batteries, then the biggest recall in consumer electronics history.
“You may see some problems as consumers bring back their phones,” an analyst at Theodoor Gilissen in Amsterdam, Wing-Yen Choi, said. It probably won’t affect the shares as it’s temporary and relates to the past, said Mr. Choi. Osaka-based Matsushita Electric will discuss replacement costs with Nokia, a spokesman in Tokyo, Akira Kadota, said.
Shares of Nokia fell 35 cents, or 1.6%, to 22.28 euros in Helsinki. The stock has gained 44% this year. Matsushita shares closed unchanged at 2,120 yen on the Tokyo Stock Exchange.
“The supplier is responsible for quality,” a Nokia spokeswoman, Arja Suominen, said. It’s too early to estimate the potential cost or how many batteries will be replaced, she said. Nokia said some of the BL-5C batteries may overheat because of a short circuit while they are being charged. Consumers with the batteries can ask for replacements, Nokia said.
An analyst at Dresdner Kleinwort, Per Lindberg, estimates the total cost will be as much as 500 million euros, according to a note yesterday. He said it’s unclear how much of it would be borne by either company.
“I believe it is the responsibility of the supplier, like in Sony’s case,” an analyst at OKO Bank in Helsinki, Hannu Rauhala, said. “For Nokia, it’s the annoyance of collecting and changing the batteries.”
