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Sony Laptop Batteries Under Investigation by U.S. (Update5)

By Ian King

Aug. 17 (Bloomberg) -- All Sony Corp. batteries made for laptop computers are being reviewed by the U.S. Consumer Product Safety Commission after Dell Inc. this week recalled 4.1 million units that may burst into flames.

The commission is in discussions with Sony, said Scott Wolfson, a spokesman for the organization that investigates products which may put consumers at risk.

``We are trying to ensure that no other consumer is in harms way,'' Bethesda, Maryland-based Wolfson said.

Sony, the world's second-largest maker of consumer electronics, said Aug. 15 it expects to share costs associated with the recall, estimated by some analysts at as much as $400 million. Dell, the biggest personal computer maker, a day earlier announced the largest-ever recall of a consumer electronics product following incidents of laptop batteries overheating.

``Companies do have to take into account that if they have Sony manufactured batteries, they're going to have to deal with it in some way,'' said Roger Kay, an analyst at Endpoint Technologies Associates in Wayland, Massachusetts. ``The end result is everybody panics,'' even though the number of batteries at risk is small, he said.

Shares of Sony gained 1.2 percent to 5,230 yen today on the Tokyo Stock Exchange.

``We have not received any orders from the Consumer Product Saftey Commission,'' said Tokyo-based Sony spokesman Yoshikazu Ochiai.

The company's American depositary receipts traded on the New York Stock Exchange fell 0.2 percent to $44.97 at 4 p.m. in New York. The ADRs have gained 10 percent this year.

`Being Conservative'

While Tokyo-based Sony is cooperating with government and consumer-related organizations, it has no information on a wider investigation of the company's batteries, said U.S.-based Sony spokesman Rick Clancy.

The recalled devices were used in Dell's Latitude, Inspiron and Precison laptops sold from April 2004 until last month, Dell said. The batteries were made in Japan and assembled in China by Sony workers.

``Because this problem is one that may not even show up for a period of time, I don't think you can categorically say there is no problem,'' said Rob Enderle at the Enderle Group in San Jose, California. ``When something can be life threatening its better to err on the side of being conservative.''

Sony's batteries alone are not a problem, it's the combination with the Dell charger that may have caused issues, Sony's Ochiai said Aug. 15.

Computer Makers

Hewlett-Packard Co., the second-largest maker of PCs, uses Sony batteries, not its battery packs which include circuitry, cover and connectors to the computer.

``The issues that have been publicized have been about Sony battery packs, and we don't use any of them in our notebooks,'' Chief Executive Officer Mark Hurd, told analysts on a conference call yesterday. Hewlett is based in Palo Alto, California.

Gateway Inc., the third-largest U.S. PC maker said its systems are not at risk.

``It appears that a combination of factors led to the fault requiring that recall, and this combination is not present in our systems,'' said Lisa Emard, a spokeswoman for the Irvine, California-based company in an e-mail. ``Gateway notebooks use different battery cells than those implicated in our competitor's recall.''

Apple Computer Inc., maker of the Macintosh computer, is investigating whether the recall affects current or previous models, Lynn Fox, a spokeswoman at the Cupertino, California- based company, said today.

Sony ranks behind Matsushita Electric Industrial Co., the world's biggest comsumer electronics maker.

To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net.

Last Updated: August 17, 2006 20:40 EDT

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