The recall, announced on Wednesday, is a blow to Sony, which is taking its first steps back into the mobile phone sector. It comes amid market speculation that the company has a high electronics inventory and fears that sales of its PlayStation2 game console will be hit by the launch of Microsoft’s Xbox.
Sony’s share price was hit by a Nihon Keizai newspaper report that put the cost of the KDDI and other recent handset recalls at ¥20bn-¥23bn, eating into Sony’s estimate of ¥150bn group net profit this year.
Sony declined to comment on the newspaper’s estimates but industry analysts are touting a figure of about ¥12bn, which could halve the company’s first quarter pre-tax profits. However, Sony could choose to spread the loss through the year, he said.
The recall underscores the technological problems handset makers face with the current and next generation mobile phones. Matsushita Communication Industrial recalled 230,000 NTT DoCoMo handsets earlier this year and Sony in May recalled handsets for DoCoMo and KDDI.
Sony’s shares fell to as low as ¥7,530 in afternoon trade, the lowest intra-day level since December 12. Its shares closed at ¥7,590, down ¥210 or 2.7% from Wednesday, and the lowest close since December 22.
