Nokia, the world's largest mobile phone manufacturer, was yesterday forced into one of the world's largest product recalls as the Finnish company admitted the batteries in 46m of its phones could be faulty.
The news saw more than half a billion pounds wiped off the company's stock price as analysts said the recall could cost up to €500m (£340m). Nokia has set up a page on its website to deal with consumers worried that their phone may contain one of the faulty batteries.
Nokia is likely to recoup any losses from Japan's Matsushita, which made the batteries, but the recall is a blow to the company's reputation. Brand experts Interbrand estimate Nokia's brand is worth nearly £17bn, making it the world's fifth most valuable after Coca-Cola, Microsoft, IBM and GE.
Nokia said yesterday it had received about 100 reports of its phones short-circuiting while being charged, causing the handset to overheat. Nokia stressed that "no serious injuries or property damage have been reported".
The potentially faulty batteries, marked BL-5C, were supplied by Matsushita between December 2005 and November 2006. They are used in many Nokia phones sold in Britain from the basic Nokia 1100 to advanced phones such as the N70. Exactly how many British consumers will be affected is unclear. Nokia said it will replace the units free of charge. Research firm Gartner estimates that each battery costs about £2.
The product recall raises further questions about the reliability of rechargeable lithium-ion batteries, which are widely used in mobile devices including Apple's iPod and iPhone.
Last year several laptop manufacturers including Apple had to recall millions of Sony batteries after reports that they overheated and represented a fire risk. Some of the batteries even exploded. Dell recalled more than 4m batteries, and Apple nearly 2m. Mobile phone batteries, however, pose a much smaller risk as they carry less charge than batteries found in laptop computers.
Shares in Nokia dropped by nearly 1% to €22.42.