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Dell’s battery problem and Sony August 15, 2006

Posted by fukumimi in Economy & Business, electronics, IT, Japan, technology, Uncategorized.

With stories of Dell laptops doing a good impression of spontaneous combustion making the rounds, it was probably just a matter of time before a major recall was announced.

And here it is. A staggering 4.1Million machines are affected. The company responsible for creating the exploding batteries is the firm everybody loves to pick on these days, Sony.

I wonder what kind of hit Sony will take from this incident. I suspect Dell will be expecting Sony to foot a significant portion of the bill, as Sony has said that a manufacturing fault has been identified with the batteries it supplied. At $60-180 a pop, that’s $400million at retail prices (so probably a direct hit of at least $100million or so). Add the costs of advertising the recall, the logistics costs, and paying PR guys to manage this latest PR disaster, it all adds up. Not to mention the lost sales, for both Dell and Sony. Is this good news for alternative battery suppliers? Dell may be looking for some new suppliers….

Where is the consumer electronics engineering company we used to love, Mr Stringer? Of course, it isn’t Howard’s fault, he isn’t an engineer by any stretch of the imagination, and Sony’s problems started well before his time. Probably about the time when the founding members started being replaced by the 2nd generation. We all know the problems that family run businesses face when the founder passes the baton to his son, I don’t think the situation here is much different, unfortunately. It probably wasn’t helped by the shift from guys who understood engineering to marketing men in top management. There are a lot of middle aged ex-Sony guys who have left and are doing other things. Many of the ones I have met come across as people with a real love and passion for engineering. Which is why they probably left, disillusioned.

In cooperation with the U. S. Consumer Product Safety Commission and other regulatory agencies worldwide, Dell is today announcing the voluntary recall of approximately 4.1 million Dell-branded lithium-ion batteries with cells manufactured by Sony. Under rare conditions, it is possible for these batteries to overheat, which could cause a risk of fire.

The recalled batteries were sold with the following Dell notebook computers: Dell LatitudeTM D410, D500, D505, D510, D520, D600, D610, D620, D800, D810; InspironTM 6000, 8500, 8600, 9100, 9200, 9300, 500m, 510m, 600m, 6400, E1505, 700m, 710m, 9400, E1705; and Dell PrecisionTM M20, M60, M70 and M90 mobile workstations; and XPSTM , XPS Gen2, XPS M170 and XPS M1710. The batteries were also sold separately, including in response to service calls. “Dell” and one of the following are printed on the batteries: “Made in Japan” or “Made in China” or “Battery Cell Made in Japan Assembled in China.” The identification number for each battery appears on a white sticker. Customers should have this number available when they contact Dell to determine if their battery is part of the recall.



It looks like this fiasco is going to cost Sony in the region of $300M, and authorities have stated that they will be checking the safety of all Sony Li-ion batteries, which have been supplied to other computer manufacturers. Li-ion batteries are used elsewhere too, Cameras, mobile phones, etc etc. Sony was the first manufacturer to commercialise the Li-ion in bulk, back in about 1990, and Li-ion technology (and battery technology in general) is a cash cow for Japanese manufacturers who own a huge chunk of the market. Sony, Sanyo, Matsushita are probably the big 3. However overseas manufacturers from S. Korea, Taiwan and increasingly China have been looking enviously at the stranglehold the Japanese have had on the market. They will see this as a chance to take market share.



This seems to be just the latest in an increasingly long line of incidents which are tarnishing the reputation of Japanese manufacturing’s legendary ability to turn out highest quality products. Given that Japan has lower cost competition snapping at its heals, it really needs to get its act together and maintain class leading levels of quality and reliability as well as adoption of new technology and product innovation to stand a chance. However, with the likes of Sony and Toyota fumbling about with massive recall programmes, one must wonder if we are seeing cracks appear.


For business travellers like myself, this type of incident makes us worry that the FAA is going to ban laptop PCs from cabin baggage, as they have seen how much energy a modern laptop battery contains, and with the reports of terrorists planning to use batteries to trigger explosions, the opportunity is there to make air travel that little bit more inconvenient. For a 12 hour intercontinental flight, not being able to work on board can be a big inconvenience. And seeing how baggage handlers throw around our checked-in luggage, I certainly wouldn’t trust them with my laptop.




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