Dell Says Recall Won't Impact Its Brand in Japan

08.29.06
By Mayumi Negishi, Reuters

TOKYO (Reuters)—Dell Inc.'s recall of computers fitted with Sony Corp. batteries will not impact its brand in Japan, where two Dell computers are reported to have caught fire, the head of its local unit said on Tuesday.

"We're very bullish on how we've handled the recalls," Dell Japan President Jim Merritt told reporters. "I'm encouraged by the feedback from customers."

He declined to say how many recalls have taken place in Japan , saying only that "we've been very, very busy answering a lot of calls."

Earlier this month, the world's largest PC maker launched a recall of 4.1 million batteries for notebook computers, its biggest-ever recall, over concerns that the lithium-ion batteries made by Sony could overheat and catch fire.

It has not given a country-by-country breakdown of the recall figures.

Pictures of a Dell laptop bursting flames at a conference in Osaka appeared on a technology industry Internet site in June.

Japan 's Ministry of Economy, Trade and Industry said this month it had received a report of a separate incident of a Dell computer battery catching fire last October.

In the April-June quarter, aggressive pricing and advertising helped Dell elbow out Fujitsu Ltd. to become the second-largest PC supplier in Japan after NEC Corp. with 16.1 percent market share, according to research firm IDC.

Despite the negative publicity, Texas-based Dell will be able to beat out NEC for the number one slot in Japan in one to two years if it continues to gain market share at its current pace, Merritt said.

"As dynamics in Japan continue to change, it is my belief that they will change in favor of Dell" and its direct-sales business model, he said.

Revenues in Japan from software and peripherals rose 30 percent in April-June from the same period last year, helped by strong sales of laser printers, which Dell began selling in Japan last year in competition with Japanese rivals Canon Inc. and Ricoh Co. Ltd.

Dell entered Japan 's office-use color printer market last month with prices at about half that of competitors' models.

After Dell's recall, Apple Computer Inc. announced it would recall 1.8 million lithium-ion notebook batteries, also made by Sony.

(Additional reporting by Sachi Izumi)

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