The Dell and Apple battery recall: Airport security changed the calculus?

Apple and Dell have recently put out recalls for laptop computer batteries made by Sony Corp. On a discussion list I subscribe to, lister Simon Higgs speculates on the number-crunching that took place at corporate HQ for both companies.  (All dollar figures here are in US$):

From: Simon Higgs
Date: August 25, 2006 3:32:05 AM EDT

Recalls never happen without a sound business case for them. It's a risk management strategy. The manufacturer weighs the risk of lawsuits (or similarly damaging events) versus the actual cost of the recall. Whichever is the cheaper route for the manufacturer is the route chosen.

6 million laptop batteries have a retail cost of around $774,000,000 (based on 13″ Macbook battery at $129). Assuming a manufacturing cost of $15 each, this is about $90,000,000. Whatever the real reasons, it's cheaper to pay nearly $100,000,000 in recalls than it is to preserve the status quo and only make payouts on the quiet.

My guess, and this is only a guess, is that this was prompted by the recent ban of laptops in carry-on luggage on aircraft. With a laptop in the cabin, if it's battery caught fire, there would be humans (and fire extinguishers) nearby to put out the fire. With laptops being carried in baggage, the risk of 20 (using Lauren's figure) in 6 million batteries catching fire becomes only 1 in 300,000.

Given that there are about 30,000 commercial flights per day in the US (and about 5,000 airborne at any given moment), it's not too far fetched to assume that eventually an unattended battery fire will bring down a commercial airliner. Or two. That's the risk that exceeds $100,000,000 and was what prompted (I think) the recall.

Simon

2 thoughts on “The Dell and Apple battery recall: Airport security changed the calculus?”

  1. David, I hate to rain on the parade, but the battery recalls are because the batteries can overheat WHEN USED and explode causing serious damage to the user depending on their positioning. I find it highly unlikely that a laptop would be in anything higher than sleep mode in the baggage section of an airplane.

  2. i think solid State is a hard drive where the storage is stored on flash memory rather than a mechanical device. Solid State hard drives are much much faster in every way than traditional hard drives.

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