Laptop recall

Ashley Milne-Tyte Aug 15, 2006

SCOTT JAGOW: You know how the bottom of your laptop computer gets really warm? Well, warm is one thing. Bursting into flames is another. Dell is recalling more than four million laptop batteries because they might catch on fire. In fact, they have — at least six times.This affects laptops sold between April 2004 and last month. As Ashley Milne-Tyte reports, Dell really didn’t need this.

ASHLEY MILNE-TYTE: The lithium-ion batteries were actually made by Sony, but in the short term at least the bad PR will cling more strongly to Dell.

That’s according to Richard Stice, a computer hardware analyst at Standard and Poor’s.

Dell’s had markedly lower sales this year and issued a profit warning last month. Stice says it’s curious that the company didn’t wait till Thursday to make this announcement. That’s when its second quarter earnings come out.

But then it could be an attempt at damage control.

RICHARD STICE:“To some extent they’re trying to manage this and get out in front of it before you know there’s something more catastrophic that potentially that occurs with one of the laptops, but at the same time, tough to spin it as a positive development for the company. The timing is not optimal to say the least.”

But he says it’s too early to say whether investors will punish Dell, because it’s not yet known whether Dell or Sony will bear more of the cost burden of replacing the batteries.

In New York I’m Ashley Milne-Tyte for Marketplace.

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