Matsushita reduces pain over battery gaffe

Japanese manufacturer Matsushita possibly eased some jittery nerves with the announcement that the replacement of 46 million faulty phone batteries will cost less than expected.

Nokia issued an advisory on the faulty batteries last week, after reports of overheating came flooding in.

The product advisory applies to the 46 million Nokia-branded BL-5C battery manufactured by Japanese vendor, Matsushita Battery Industrial, between December 2005 and November 2006. Analysts initially expected the replacement procedure to cost some $1.2bn and must have been relieved when Nokia said Matsushita had agreed to bear the costs.

The total direct costs are currently estimated to be between approximately Y10bn and Y20bn (Eur63m to Eur127m), the company said.