Troubled Sony slashes profit forecast

TOKYO — Just saying the word “recall” is enough to make a company chief cringe.

Now imagine being Sony chief executive Howard Stringer and saying it more than 9 million times.

Stringer, the Japanese electronics manufacturer’s first foreign chief executive, has his hands full these days with the massive recall of lithium-ion batteries for laptops and with production delays in the company’s much hyped next-generation game console.

Sony Corp. said Thursday that the recall of some 9.6 million batteries, announced in recent weeks by just about every major laptop maker in the world, will cost the company 51 billion yen ($429 million), instead of the earlier estimate at between 20 billion yen ($168 million) and 30 billion yen ($252 million).

Sony acknowledged that the price cuts in Japan for the PlayStation 3 video game console and the production problems for the machine will also chip away at sales and profits at its gaming division.

Although prices on game machines tend to gradually come down, the announcement last month by Sony Computer Entertainment to cut the price of the basic model by about 20 percent to 47,600 yen ($400) was highly unusual in coming even before the machine went on sale.

“Hopes for the PlayStation 3 have really come down,” said Toshiaki Nishimura, analyst at Yasuda Asset Management Co., adding that the market and game software developers are expecting far more success from the rival offering from Nintendo Co. Wii.

The PlayStation 3 is going on sale in Japan Nov. 11 and Nov. 17 in the U.S. but were delayed until March 2007 in Europe because of the production problems.

In fact, although the company plan to ship 6 million PlayStation 3 machines by March, it will only have 400,000 machines in the United States and 100,000 in Japan for their launches.

“Investigators scoped out a Wall Street Journal reporter’s trash as part of a now-discredited boardroom leak probe that cost the chairwoman of computer maker Hewlett-Packard Co. her job and led to criminal charges.

In a first-person story on the front page of Thursday’s newspaper, reporter Pui-Wing Tam said HP disclosed to her on Wednesday that it hired a security firm that considered rummaging through the garbage of her suburban home, hoping to glean possible details about her reporting.

HP chairwoman Patricia Dunn and the company’s ethics chief Kevin Hunsaker, who directed the boardroom spying probe, have been charged with identity theft and three other felonies.