September 5th, 2008Recall of PCs worldwide: a major setback for electronics giant Sony
Sony has been made to call back hundreds of thousands of Vaio machines amid media reports that some caught fire, injuring their users. The recall of 438,000 PCs worldwide is a major setback for the electronics giant.
The recall is also an embarrassment for Sony. It was forced to recall almost 10m lithium ion batteries in 2006, at a cost of £272m, amid worries that they could overheat. Sony stated it would provide free repairs for customers in the 48 countries, including the UK and the US, in which the potentially defective model is on sale.
A Sony source, who did not want to be named, admitted to The Guardian newspaper that the company had known about the issue since last August.
“We fully recognise the fact there were problems with the (slow) speed of our response, but we are trying our best to address it and make sure it does not happen again,” the source added.
Sony insisted that the issue would have a minor effect on earnings, but analysts stated it could harm the company’s brand.
Things to consider:“If these things pile up and reveal that the firm is structurally weak, its brand value will definitely be hurt,” stated analyst Mitushige Akino of Ichiyoshi Investment Management.
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