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News >  Business

Shhhh … companies offer to repair chips

Gary McWilliams The Wall Street Journal

Electronics companies are quietly offering to repair more than 80 models of digital cameras, camcorders and hand-held computers because of a faulty imaging chip that can render the cameras useless.

The chip, which is used to convert light into an electronic signal, is apt to fail in hot and humid environments, according to the companies. When a chip fails, the camera will show black images or distorted colors in the viewfinder or LCD display and in any print or digital output. The defective chip was used in an unknown number of cameras, camcorders and hand-held computers sold during the past three years by Sony Corp., Canon Inc., Konica Minolta Holdings Inc., Ricoh Co., Fuji Photo Film Co., Nikon Corp. and Olympus Corp. While Sony says it stopped manufacturing the chip in March 2004, some cameras containing it may still be sitting unsold on dealers’ shelves.

The companies are promising to repair products if their chips fail and have posted notices listing models that contain the chip on their Web sites. But because the chip fails only some of the time, none is issuing a broad recall — and there is nothing consumers can do if they have a model containing the chip but it hasn’t failed. The tactic resembles what consumer advocates have dubbed silent recalls in the auto industry — fixing the defect only if a customer complains about it.

The repair offer comes just before the industry’s biggest selling season. Digital-camera makers get almost half of their $32 billion in annual sales in the fourth quarter from Christmas gift-giving. If handled poorly, the repairs could have a negative impact on camera sales, said Chris Chute, a digital-camera analyst at International Data Corp. But with consumer alerts and repair offers coming well before December, there is time to smooth over any hard feelings, he said.

Several camera makers identified Sony as the key supplier of the defective chip.

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