Dell Recalls Hazardous Batteries

Dell Computer (Nasdaq: DELL), which recalled 400,000 notebooks with defective memory chips earlier this year, on Friday began recalling nearly 27,000 notebook batteries that the company says have the potential to cause fires.

“These batteries can short-circuit, even when the battery is not in use, potentially causing them to become very hot, release smoke and possibly catch fire,” the company said in a statement.

Dell said it received one report of a defective battery catching fire, resulting in property damage but not personal injury. The company stressed that only the batteries and not the computers are faulty.

Sanyo Electric Made Batteries

Officials at the world’s largest direct computer systems company said they do not expect the recall to have a substantial financial impact, other than the public relations problems associated with a recall.

“It will be taken care of in a way that will prevent [any material effect],” Dell spokesman T.R. Reid told the E-Commerce Times.

Sanyo Electric made the batteries for Dell, but Reid would not say whether Sanyo was assuming all financial liability.

Web Site Offers Recall Information

Because Dell mostly sells its computers directly to customers, it is simpler and cheaper for the company to locate customers who have purchased the defective components, unlike makers who sell through retailers.

Dell said the batteries were sold in its computers shipped directly to customers from June 22nd to September 15th of this year in North, Central and South America and from June 22nd to October 4th in Europe, the Middle East and Africa.

Batteries were shipped in Inspiron and Latidude notebooks. The company has set up a special Web site to provide information about the recall.

The memory chip problem earlier this year also involved Dell’s Inspiron and Latitude computers, causing data corruption and loss under certain conditions. That problem involved laptops shipped between February and November of 1999.

Mainly Desktop Problems

Component problems have been cropping up for several manufacturers. Earlier this year, IBM recalled up to 220,000 defective AC adapters for its ThinkPad portables, while Toshiba recalled notebooks with defective processor components.

However, component problems have mainly affected desktops, with Intel shouldering much of the responsibility. Intel had to recall nearly a million motherboards because of defective chips and, in August, recalled 1.13 GHz Pentium 3 processors. The company also was forced to delay the much-anticipated launch of its Pentium 4 processor last month due to chipset problems.

Dell Shares Drop

For the 26 weeks ended July 28th, Dell Computer’s revenues rose 28 percent to $14.95 billion (US$) and net income rose 20 percent to $1.13 billion. Dell shares hit a new 52-week low of $22.063 on October 11th.

Dell designs and manufactures a range of computer systems, including desktops, laptops, servers and workstations. The company also sells software and support programs.

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