Matsushita Paying For Nokia Battery Recall

Nokia and Matsushita have agreed on how to handle the cost of recalling 46 million cell phone batteries: Matsushita is paying up to $172 to pay for it all.

Earlier this month, Nokia announced a recall encompassing more than 46 million cell phone batteries. It’s a testament to the size of Nokia’s business—they are the world’s largest handset manufacturer, after all—that those 46 million batteries constituted only about 15 percent of batteries the company shipped under the BL-5C label. But what was recalling 46 million batteries worldwide going to cost the company?

Today, Nokia has an answer: nothing. According to Nokia, all direct costs of the battery recall will be born by the batteries’ manufacturer, Matsushita Battery, including expenses for replacement batteries, call center costs, and the logistical expenses of the recall. Although Nokia doesn’t provide a cost estimate in its statement, Matsushita has said separately that it expects costs of the recall to land between 10 and 20 billion yen (between $86 and $172 million). Matsushita’s estimate is lower than many analysts had expected—some estimates put the cost of the battery replacement program over 100 billion yen (over $800 million) which would significantly impact Matsushita’s fiscal outlook. The company says it has no plans to alter its earnings forecasts as a result of the recall.

In comparison, the 2006 recall of Sony-manufactured batteries for notebook computers encompassed only about 10 million units but cost the Japanese company over $400 million.

Nokia owners who want to check to see if their mobile phone battery is included in the recall can get all the details from Nokia’s recall Web site.