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[August 15, 2006]

Dell to Replace Notebook Batteries

(AP) Dell (News - Alert) to Replace Notebook Batteries
By DAVID KOENIG
AP Business Writer
DALLAS

0815dv_dell_batteries
Dell Inc. said it will issue free replacement batteries to the owners of 4.1 million notebook computers with batteries made by Sony Corp. that were determined to be at risk of overheating and catching fire.

Round Rock-based Dell negotiated conditions of the recall with the federal Consumer Product Safety Commission, which called it the largest electronics-related recall ever involving the agency.

A Dell spokesman said Monday that the Sony batteries were placed in notebooks that were shipped between April 1, 2004, and July 18 of this year.

"In rare cases, a short-circuit could cause the battery to overheat, causing a risk of smoke and/or fire," said the spokesman, Ira Williams. "It happens in rare cases, but we opted to take this broad action immediately."

The battery packs were included in some models of Dell's Latitude, Inspiron, XPS and precision mobile workstation notebooks. Dell planned to launch a Web site overnight that would describe the affected models. Williams said the Web site would tell consumers how to get free replacement batteries from Dell.

Rick Clancy, a Sony spokesman, said the companies have studied problems with the battery packs intensely for more than a month, after getting reports of about a half-dozen fires or smoking laptops in the United States.

Lithium-ion batteries have been around for about a decade and are used in devices such as cell phones and digital music players. Clancy said tiny metallic particles sometimes short-circuit the battery cells, adding that configuration in an electronic device can contribute to problems.

"But it begins with the (battery) cell, and we acknowledge that," he said. "That's why we're supporting Dell in this recall."

Clancy said Sony would help Dell pay for the recall, but neither he nor Dell officials would estimate the campaign's price tag or say how the companies would divide the cost.

The larger potential cost for Dell is that such a huge recall could dampen future notebook sales.

Dell rival Hewlett-Packard (News - Alert) Co. said it does not use Sony batteries and was not affected by the recall. Apple (News - Alert) Computer Inc. is investigating whether its notebook batteries meet safety and performance standards, spokeswoman Lynn Fox said.

There have been numerous recent news reports about Dell laptops bursting into flames, and pictures of some of the charred machines have circulated on the Internet.

Dell, the world's largest maker of personal computers, confirmed that two weeks ago, one of its laptops caught fire in Illinois, and the owner dunked it in water to douse the flames. Other reports have surfaced from as far away as Japan and Singapore.

Monday's move was at least the third recall of Dell notebook batteries in the past five years.

Dell recalled 22,000 notebook computer batteries last December after they had symptoms similar to those that prompted Monday's recall. The company also recalled 284,000 batteries in 2001.

Consumers with affected laptops should only run the machines on a power cord, said Scott Wolfson, a spokesman for the Consumer Product Safety Commission.

The safety agency knows of 339 incidents in which lithium batteries used in laptops and cell phones -- not just Dell products -- overheated between 2003 and 2005, Wolfson said.

The list of problems ranged from smoke and minor skin burns to more serious injuries and property damage, Wolfson said.

Most of the incidents reported to the CPSC occurred around the home, but transportation-safety officials have become increasingly concerned about the threat of a laptop causing a catastrophic fire aboard a commercial jetliner.

Dell's recall comes as it battles other questions about quality and customer service. Last year, Dell absorbed a charge against earnings of $338 million to repair faulty computer components.

Dell's sales have grown this year, but less rapidly, causing shares in the company to lose nearly one-half their value in the past 52 weeks. The shares closed Monday -- before news of the recall -- at $21.24, up 17 cents on the Nasdaq Stock Market. They fell 24 cents in after-hours trading.

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