Battery Recalls Cost Sony More Than Money
Sony’s PS3 isn’t launched yet, but it has already cost the company $366 million. That was expected and not uncommon when launching a new hardware platform. What Sony didn’t foreseen, however, was the massive battery recall that ended up costing them a whopping $429 million and sent their bottom line screaming into the basement. Practically every laptop maker in the world has recalled Sony’s lithium-ion batteries due to their unfortunate (though rare) habit of overheating and bursting into flames.
While Sony’s decision to reduce the number of PSPs shipped in fiscal 2006 makes a certain amount of sense in light of this financial news, its decision to lower the cost of the PS3 in Japan by 20% is curious. Such a slash will reduce what little profit the company was going to make on the hardware that would have almost certainly sold out at the full asking price.
The cost to Sony’s profits is obvious, but the more subtle damage was done to the company’s image as a mainstay of consumer technology.