Bloomberg News

KDDI to Replace Sony-Made Batteries in Casio, Hitachi Phones

September 30, 2011

(Updates with comment from analyst in fourth paragraph.)

Sept. 30 (Bloomberg) -- KDDI Corp., Japan’s second-largest mobile-phone operator, will replace Sony Corp.-made batteries used in as many as 2 million handsets because of concerns the devices may overheat.

The replacement affects three models made by Casio Computer Co. and Hitachi Ltd. and sold between 2007 and 2009, KDDI said in a statement today. The cost of the replacements and who will bear it hasn’t been determined, KDDI Vice President Toshio Maki said at a press conference in Tokyo.

The batteries may produce heat and melt, KDDI said today after investigations following two customer complaints in 2010 and six this year. Sony, Japan’s biggest exporter of consumer electronics, apologized in 2006 for the largest recall in consumer-electronics industry after computer makers including Dell Inc. returned 9.6 million lithium-ion batteries on concerns some could overheat and become fire hazards.

“Considering Sony’s overall business size, the expense for the battery replacement won’t likely be serious,” said Keita Wakabayashi, an analyst at Mito Securities Co. “But this could lead some consumers to question the reliability of Sony’s products.”

The replacement involves two handsets of Casio and one by Hitachi, according to the KDDI statement. One person suffered minor burns, Keiichi Sakurai, a KDDI spokesman, said without elaborating.

Toyota’s Recall

KDDI fell 3.4 percent to 536,000 yen at the 3 p.m. close of trading in Tokyo, marking a third straight day of declines. Sony dropped 0.5 percent while Casio declined 2.4 percent and Hitachi slid 0.8 percent.

Other Japanese companies have also recalled products recently. Toyota Motor Corp., the world’s largest automaker, recalled at least 8 million U.S. vehicles starting in 2009, after claims of defects and incidents involving sudden, unintended acceleration. The recalls set off hundreds of economic-loss suits and claims of injuries and deaths.

Jin Tomihari, a Sony spokesman, said the expense for the replacement is uncertain as the company needs to discuss the issue with the handset makers and KDDI. Any impact on Sony’s earnings will be “minor,” he said in a phone interview.

Sony, the maker of Bravia televisions and PlayStation game consoles, slashed its earnings forecast for the year ending March 31 by 25 percent in July, citing lower TV demand in Europe and the U.S. In 2006, Sony said the replacement would cost the company 51 billion yen ($666 million).

--With assistance from Go Onomitsu and Takashi Amano in Tokyo and Anand Krishnamoorthy in Singapore. Editors: Anand Krishnamoorthy, Terje Langeland

To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net; Kazuyo Sawa in Tokyo at ksawa3@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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