By Philipp Gollner SAN FRANCISCO - Dell Inc. said on Monday it would recall 4.1 million notebook computer batteries because they could overheat and catch fire, in the biggest recall in the 22-year history of the world's largest personal computer maker. Dell blamed the voluntary recall, issued with the U.S. Consumer Product Safety Commission, on the lithium-ion batteries made by Sony Corp. unit Sony Energy Devices Corp., which Dell said could in rare cases produce smoke and catch fire. The batteries are also used by other computer makers, including Apple Computer Inc., which said it was looking into the issue. Hewlett-Packard Co. said its notebooks were not affected by the recall. No injuries have been tied to the defect involving the Dell-branded batteries, Dell said. The company has received six reports of batteries overheating, causing damage to furniture and personal belongings, the safety commission said. Dell spokesman Jess Blackburn said a battery of the type involved the recall was in a Dell laptop that erupted in flames in Osaka, Japan, recently. The incident was captured in photographs sent across the Internet. There has also been a number of recent reports of flaming Dell notebooks. About 2.7 million of the recalled notebooks are in the United States, Blackburn said. The recall comes as Dell tries to refresh its image with a marketing campaign to demonstrate improvements in customer service after the company was hit with complaints of inferior after-sales service. Dell is investing about $100 million this year and hiring 2,000 people in the improvement efforts. The company also has taken a beating on Wall Street, with its stock falling 47 percent over the past 12 months while rival Hewlett-Packard's stock surged 37 percent. Dell's growth has slowed amid tougher competition. Dell's image now hinges on how the company manages the recall, said Roger Kay, president of market researcher Endpoint Technologies Associates. "It could cut either way, depending on how they handle it," Kay said. "The circumstance of failure is an opportunity to touch customers. If they touch them well and kindly, then customers will touch them well, too." Apple said it was looking into the matter. "We are currently investigating whether batteries that have been supplied to Apple for our current and previous notebook lines meet our high standards for battery safety and performance," said Apple spokeswoman Lynn Fox. HP of Palo Alto, California, said in a statement, "HP notebooks are not affected by the battery replacement/recall program announced by Dell. The recall is specific to Dell and its battery packs." The recall of batteries in machines sold from April 2004 through last month spans Dell's notebook lines, including Latitude, Inspiron and Precision models, Blackburn said. They ranged in price from $500 to $2,850, Dell said. Blackburn also said the recall would have no financial "material impact" on Round Rock, Texas-based Dell. Rick Clancy, a spokesman for Sony Electronics Inc. in the United States, said the financial impact of the recall to Sony "is still not fully determined" and partly depends on how many people participate in the recall. Sony and Dell cooperated in investigating and presenting the matter to the consumer safety commission. Neither party has resorted to litigation, Clancy said. Sony has addressed the safety problem in its lithium-ion battery cells, Clancy said: "Further modifications have been made that provide a greater level of security." The recall involves 18 percent of Dell's 22 million notebook computers sold between April 2004 and July 2006. It also comes three days before Dell is scheduled to report its fiscal second-quarter earnings. Shares of Dell were down 27 cents, or 1.3 percent, at $20.97 in extended trading. Shares of HP rose less than 1 percent to $33.46 in extended trade.
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