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The battery recall Apple (Nasdaq: AAPL) instituted for Sony-made notebook batteries last week may have become more urgent Tuesday after Japanese authorities said they had a confirmed case of an Apple laptop catching fire.
Japan's Ministry of Economy, Trade and Industry ordered Apple to investigate the problems further and report back to it within a week with a plan to ensure all similar batteries in use are safe or are recalled and replaced. Apple could face modest fines if it fails to meet the Sept. 5 deadline for reporting.
Ensuring Safety
The case occurred in April and involved an iBook G4. The user suffered minor burns when the battery sparked a small fire, the agency said. The ministry also ordered other PC and electronics makers to review their products to ensure battery safety.
Last week, Apple ordered the recall of 1.8 million Sony-made batteries worldwide. At the time, however, the computer maker said while it had reports of batteries overheating, there were no known cases of the notebooks actually catching fire. It was not immediately clear whether the battery that caught fire was involved in the original recall.
Dell (Nasdaq: DELL) also issued a recall of 4.1 million laptop batteries after the U.S. Consumer Product Safety Commission confirmed reports of actual fires, including at least two such instances in Japan.
Apple shares, which were hit in the wake of the recall, fell another 2.7 percent in morning trading Tuesday to US$65.16.
Recalls Over?
All of the recalls and overheating problems reported to date involve lithium-ion battery cells produced by Japan-based Sony (NYSE: SNE) Energy Devices, a subsidiary of the consumer electronics giant.
Sony said Monday -- before the revelation of the laptop fire in Japan -- that it expected no additional recalls of its batteries, which may suggest that the Japanese problems are captured by the original recall notice.
Sony said its own line of Vaio notebooks are not impacted by the problems, and that it has rectified the problem that causes the overheating, which stems from tiny metal particles that are left behind during the manufacturing process.
Continued problems and reports of new cases could start to dent sales 
for Apple and Dell, with the latter probably more susceptible to lost sales because its PCs are considered more of a commodity than the unique Apple brand, and because it has numerous competitors who make similar machines at about the same price point.
"The recall news could sway consumer purchase decisions in the key back-to-school season," said Moors & Cabot analyst Cindy Shaw. With a major restructuring under way, a move away from rebates in progress and a push to improve customer service, Dell can ill afford any additional slip-ups. Apple, however, may be better able to sustain the bad news because its brand is considered differentiated from Windows-based PCs.
Setting Standards
Meanwhile, the PC industry said its major players will cooperate to take on the problem of battery safety. Both Dell and Apple have said they would take part in a meeting next month of the critical parts committee of IPC, a computer trade group. That meeting was scheduled before Dell kicked off the recalls on Aug. 14, according to the group.
The committee is headed by John Grosso, a production manager at Dell.
The best way to avoid future problems like those associated wit the lithium-ion technology is to create industry-wide standards for manufacturing and assembly, said Grosso. "While the committee had identified lithium ion batteries as the next product for standardization, we are going to accelerate our activities now," he added.
Other PC makers who use Sony batteries may be watching carefully to see how things unfold, noted Endpoint Technologies analyst Roger Kay, and the Japanese situation may even prompt more internal reviews, if not outright recalls.
"It's unlikely the problems are limited to one or two brands," Kay told MacNewsWorld. For smaller PC makers in particular, however, the odds of avoiding any high-profile incidents may be good. "In terms of the number of PCs sold, the number of incidents is still very small."
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