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Nokia battery recall to cost Matsushita up to $172m

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Nokia's decision to recall 46m mobile phone batteries is going to cost their manufacturer, Matsushita, up to $172m, the Japanese company admitted today.

Matsushita - better known for its Panasonic brand - said it would shoulder the ¥10-20bn ($86-172m) cost of the battery replacement programme. It said the burden wouldn't force it to reconsider its forecast of ¥477bn ($4.1bn) profits for the year to March 2008.

The Finnish phone giant asked consumers to return the batteries - model number BL-5C - earlier this month, warning that the power packs could overheat. That in turn could create a short circuit causing the cells to - as Nokia put it - "dislodge".

By 'dislodge', we assume Nokia has in mind something a little more hazardous to life and limb than the BL-5C falling out of the phone. How else are we to take the claims by Japanese boffins that lithium-ion batteries are inherently flawed and all those cases of spontaneously combusting battery-powered laptops?

That said, Nokia was quick to point out that "no serious injuries or property damage have been reported".

Not all BL-5Cs have been recalled - only those made by Matsushita between December 2005 and November 2006.

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