Update: Nokia says 46M batteries may overheat

They were made by Matsushita between December 2005 and November 2006

Nokia Corp. is offering to replace 46 million batteries manufactured by another company for use in its mobile phones because of a risk of overheating, Nokia said on Tuesday.

The faulty batteries were manufactured by Japan's Matsushita Battery Industrial Co. and sold in a wide range of Nokia phones, from its low-end 1100 family of products up to its pricier N91 and E60 devices.

Nokia said that in "very rare cases" a short circuit can cause the Nokia-branded BL-5C batteries to overheat while they are being recharged. The company said it knows of about 100 incidents so far but said that no serious injuries or property damage have been reported.

The overheating can cause the battery to "pop out" of the phone while it's being recharged, said Nokia spokeswoman Marianne Holmlund. She said there is no risk of fire, although it's unclear what caused the minor incidents that have been reported.

"It may be that the device left a small burn on a shelf while it was recharging, it's hard to say for sure," said John Devlin, research director for mobile technologies at IMS Research in England.

People concerned about the problem can get their battery replaced for free, Nokia said. It set up a Web page that lists the phone models and describes how customers can check if their battery is affected.

The Finnish phone maker has several suppliers for its BL-5C batteries and doesn't expect any shortages, Holmlund said. The suppliers have made about 300 million BL-5Cs altogether, Nokia said.

The problem exists only with Matsushita batteries manufactured between December 2005 and November 2006, and the phones would have been sold worldwide during roughly the same period, Holmlund said.

Nokia reported selling 347 million phones in 2006, making 46 million a significant proportion of its annual sales. "It is about 10% of all the phones sold, but we are talking about 100 incidents, which is only a tiny proportion," Holmlund said.

Nokia expects Matsushita to bear "certain financial responsibilities" for the replacement program, she said. Peter Weber, a spokesman for Matsushita in Europe, said the financial terms are being negotiated now between the companies.

The recall could be expensive if all 46 million customers decided to replace their batteries. But typically in such cases only a small proportion of customers bother to return their products, Devlin noted. "I don't see this having a lasting effect for Nokia, just because it seems to be battery issue," he said. "They're offering to replace the batteries, so I think they're taking the necessary steps."

It's the first time Nokia has had to offer such a replacement program, Holmlund said.

Such problems in phones normally arise because of counterfeit batteries, making this case "a little unusual," Devlin said.

The problem is unlikely to affect other makes of cell phones since the batteries were designed especially for Nokia, Weber said. Cell phone batteries are typically designed and manufactured for a particular phone maker, Holmlund confirmed.

It's only the latest incident involving rechargeable lithium-ion batteries used in portable electronics products. Late last year, laptop makers, including Sony Corp., Toshiba Corp. and Dell Inc. offered to replace 8 million laptop batteries because of a manufacturing defect in Sony-made batteries that left them vulnerable to short-circuiting and catching fire.

Matsushita Electric Industrial Co. has said it is developing a new type of lithium-ion battery that won't overheat even if a short circuit occurs.

The company said it will work with Matsushita and the relevant authorities to investigate the problem. A picture of the BL-5C is here.

Copyright © 2007 IDG Communications, Inc.

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