Sony warns of shock risk in some Vaio laptops

Dom · Jul 10, 2003, 01:54 PM

TOKYO/SAN FRANCISCO (Reuters) - Sony says it will recall about 18,000 Vaio laptop computers globally, including 13,000 in Japan, due to the risk of a small electric shock caused by faulty modems.
The world's largest consumer electronics maker also said about 3,000 Vaio laptops it shipped in the United States and about 2,000 in Europe are subject to the technical glitches and owners are entitled to a free repair.

Sony said it had estimated the global recall would cost it 500 million yen, 0.01 percent of the sales of its electronics division in the 2002 business year, but the figure had not yet been finalised.

Credit Suisse First Boston Japan Ltd analyst Masahiro Ono said the recall would not be serious enough to change his earnings forecast for Sony, but its brand image could be hurt if there were more recalls.

"Sony has had a number of recalls including mobile phones," he said. "It's a shame because PC sales have been going well this year after a slump last year."

The recall of the laptops, Sony's mainstay product along with Walkman devices and the Vega TV series, comes on top of its recall of some 40,000 desktop PCs in Japan, the United States and Canada due to defective supply parts since late last year.

Sony is the world's sixth-largest PC vendor, holding about 2 to 3 percent of the worldwide market in the second quarter of last year. It shipped 3.1 million Vaio PCs globally in the year to March 2003.

In Japan, Sony was the third-biggest PC maker, shipping 1.52 million PCs in 2002 and holding a market share of 13.5 percent.

The recall announcement weighed on shares in Sony, which were down 2.31 percent at 3,800 yen in Tokyo afternoon trading, underperforming the Nikkei average, which was down 0.19 percent.

Sony shocked investors in April by falling far short of earnings targets and warning of a profit slide ahead, blaming war worries and a costly reform scheme.

Its performance was particularly dismal in its fiscal fourth quarter. It posted a consolidated net loss of 111.14 billion yen for January-March, its worst quarterly loss in more than eight years, due in part to slow sales of appliances such as Vaio PCs and colour TVs.

MODEM PROBLEMS

The laptop affected by the recall is the FR series, or FRV in the United States, a popular model with a large screen and with a price starting around $1,500.

Mary EcEvoy, a spokeswoman for Sony in the United States, said a user could receive a shock such as that from static electricity if "you have connected your PC (laptop) to external power, you have disabled your phone line, (while) simultaneously being connected to a grounded peripheral, and you are touching a metal part of the PC, and your phone rings".

There had been no injuries, McEvoy said, and fewer than 10 complaints had been received.

Sony said registered customers will be notified by e-mail and a notice may be posted on the support section of its website.

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Source: Reuters

Jul 10, 2003, 01:54 PM	#1
Dom DriverHeaven Extreme Member Join Date: Jun 2002 Posts: 12,940 Rep Power: 0	Sony warns of shock risk in some Vaio laptops TOKYO/SAN FRANCISCO (Reuters) - Sony says it will recall about 18,000 Vaio laptop computers globally, including 13,000 in Japan, due to the risk of a small electric shock caused by faulty modems. The world's largest consumer electronics maker also said about 3,000 Vaio laptops it shipped in the United States and about 2,000 in Europe are subject to the technical glitches and owners are entitled to a free repair. Sony said it had estimated the global recall would cost it 500 million yen, 0.01 percent of the sales of its electronics division in the 2002 business year, but the figure had not yet been finalised. Credit Suisse First Boston Japan Ltd analyst Masahiro Ono said the recall would not be serious enough to change his earnings forecast for Sony, but its brand image could be hurt if there were more recalls. "Sony has had a number of recalls including mobile phones," he said. "It's a shame because PC sales have been going well this year after a slump last year." The recall of the laptops, Sony's mainstay product along with Walkman devices and the Vega TV series, comes on top of its recall of some 40,000 desktop PCs in Japan, the United States and Canada due to defective supply parts since late last year. Sony is the world's sixth-largest PC vendor, holding about 2 to 3 percent of the worldwide market in the second quarter of last year. It shipped 3.1 million Vaio PCs globally in the year to March 2003. In Japan, Sony was the third-biggest PC maker, shipping 1.52 million PCs in 2002 and holding a market share of 13.5 percent. The recall announcement weighed on shares in Sony, which were down 2.31 percent at 3,800 yen in Tokyo afternoon trading, underperforming the Nikkei average, which was down 0.19 percent. Sony shocked investors in April by falling far short of earnings targets and warning of a profit slide ahead, blaming war worries and a costly reform scheme. Its performance was particularly dismal in its fiscal fourth quarter. It posted a consolidated net loss of 111.14 billion yen for January-March, its worst quarterly loss in more than eight years, due in part to slow sales of appliances such as Vaio PCs and colour TVs. MODEM PROBLEMS The laptop affected by the recall is the FR series, or FRV in the United States, a popular model with a large screen and with a price starting around $1,500. Mary EcEvoy, a spokeswoman for Sony in the United States, said a user could receive a shock such as that from static electricity if "you have connected your PC (laptop) to external power, you have disabled your phone line, (while) simultaneously being connected to a grounded peripheral, and you are touching a metal part of the PC, and your phone rings". There had been no injuries, McEvoy said, and fewer than 10 complaints had been received. Sony said registered customers will be notified by e-mail and a notice may be posted on the support section of its website. _____________________ Source: Reuters