Sony Recalls Vaio Batteries in Far East

The global recall of Sony PC batteries grew again today when the consumer electronics giant said it would recall 90,000 batteries used in its own range of Vaio personal computers in Japan and China.

The company said it might also have to revise downward its full-year earnings outlook to reflect the cost of the recall and its decision to cut the price of its PlayStation 3 game console in Japan by 20% to compete with rival consoles from Nintendo and Microsoft.

The recall of the lithium-ion batteries, which have been blamed on about 10 cases of overheating, stands at about 8m worldwide and has affected almost every major PC maker.

The Nihon Keizai Shimbun business newspaper reported today that Sony could eventually ask Vaio users worldwide to return as many as 300,000 batteries.

Sony stressed that no problems had been reported with Vaio batteries and that the recall was intended to give customers peace of mind.

In July Sony said it expected a group operating profit of 130bn yen (£586m) for the 2006 financial year, down 43% from 2005, but it is likely to settle for a more cautious forecast.

"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," it said in a statement.

The firm will also take into account fluctuating foreign exchange rates and the performance of its electronics and entertainment businesses.

The surprise decision to cut the price of the PS3, with a 20GB hard drive from 62,790 yen to 49,980 yen, along with a delay the European launch of the PS3 due to problems with a key component of its Blu-ray disk drive, are expected to leave Sony dealing with bigger losses than originally expected.

Sony has yet to say how much the delay and price cut will cost, although it will be hoping to recoup the losses through sales of popular software titles.

Today's recall announcement comes after the Japanese PC maker Toshiba, which is recalling 830,000 batteries, said it was considering seeking compensation from Sony for possible damage to its sales and reputation.

Fujitsu and Hitachi are reportedly mulling similar measures.

Sony originally estimated the battery recall would cost $170m to $250m, but that figure is expected to rise as the number of affected batteries continues to rise.