Sony's Battery Recall Fiasco

            
 
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Case Details:

Case Code : MKTG162
Case Length : 11 Pages
Period : 2005-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : Sony Corporation
Industry : Computer / Consumer Electronics
Countries : USA, Japan

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"It (Dell Computer's recall of Sony-manufactured batteries) will be the largest safety recall in the history of the consumer electronics industry."1

- The United States Consumer Product Safety Commission,2 in August 2006.

"Sony's brand is severely damaged. I think it's going to be a question whether they can be in the battery business at all."3

- Roger Kay, President, Endpoint Technologies Associates, Inc.,4 in September 2006.

"The company (Sony) should have investigated the cause of the battery problem more quickly. The worries over the batteries spread as a result."5

- Ryoji Chubachi, President and Electronics CEO, Sony Corporation, in December 2006.

Sony's Total Recall

On September 28, 2006, Sony Corporation (Sony), the, world's second-largest consumer electronics manufacturer, announced a worldwide recall of its lithium-ion battery packs manufactured by its subsidiary, Sony Energy Devices Corporation6 (SEDC).

These battery packs were supplied to various notebook7 computer manufacturers like Dell Computers (Dell), Hewlett-Packard Company (HP), Fujitsu Ltd. (Fujitsu), Lenovo Group Limited8 (Lenovo), Apple Inc.9 (Apple), and Toshiba Corporation (Toshiba).

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Even before Sony's announcement, many leading notebook manufacturers like Apple and Dell had recalled a large number of the Sony-manufactured batteries used in their notebooks due to reports that some of these batteries had caught fire.

Sony explained that this had happened because of microscopic metal particles in the battery cells that could cause the cell to short circuit, if they came into contact with other parts of the battery cell.

Sony said that in most cases, the battery would shut down, but in rare instances, it could overheat and catch fire.

Additionally, Sony had to recall 90,000 battery packs in the Asia Pacific region, some of which were used in its own VAIO notebooks.

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1] Damon Darlin, "Dell Will Recall Batteries in PC's," www.nytimes.com, August 15, 2006.

2] The United States Consumer Product Safety Commission (CPSC) is an independent agency of the U.S. federal government. It was established in 1972 through the Consumer Product Safety Act to ensure the safety of consumer products and protect consumers from products that could cause a fire, electrical, chemical or mechanical hazard or can injure children. (Sources: www.cpsc.gov, http://en.wikipedia.org).

3] "The Fallout from Sony's Battery Recall," www.usatoday.com, October 02, 2006.

4] Endpoint Technologies Associates, Inc., incorporated in the State of Massachusetts, is a well-known market intelligence firm in the computer industry.

5] "Battery Response Slow - Sony," http://australianit.news.com, December 04, 2006.

6] Sony Energy Devices Corporation is a division of Sony Corporation, which manufactures rechargeable lithium-ion batteries used in laptops, digital cameras, MP3 players, cell phones and other portable computer products. (Source: http://en.wikipedia.org).

7] Generally, the terms Laptop and Notebook are used interchangeably. Laptop is an older term, while the Notebook computer was a later term used to refer to a light portable computer device thinner than a Laptop.

8] Lenovo Group Limited (Lenovo) is a Chinese personal computing company, which manufacturers and markets personal computer products in over 160 countries. In April 2005, Lenovo completed the acquisition of the personal computer business of International Business Machines Corporation's (IBM). (Source: http://finance.google.com).

9] Apple Inc. was formerly known as Apple Computer, Inc. The company is a manufacturer and marketer of personal computers, related software, and portable digital audio and video players. Its annual revenues for 2006 were US$ 19.3 billion and posted a net income of US$ 1.9 billion.

 

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