By Hiroshi Suzuki and Yoshinori Eki
Bloomberg News
Wednesday, August 15, 2007

Nokia offered to replace as many as 46 million cellphone batteries made by Matsushita Electric Industrial as some may overheat, in what would be the largest voluntary consumer-electronics recall.

Nokia, the world's biggest cellphone maker, said there were about 100 cases of overheating, with no reports of serious injury or damage to property. The affected Nokia-brand BL-5C batteries were made by Matsushita from December 2005 to November 2006, said Nokia, which is based in Espoo, Finland.

The latest incident follows a series of recalls in the past year that has drawn attention to quality at Japan's electronics makers. A year ago, Sony, of Tokyo, began replacing 9.6 million notebook computer batteries, then the biggest recall of consumer electronics.

"You may see some problems as consumers bring back their phones," said Wing-Yen Choi, an analyst at Theodoor Gilissen in Amsterdam. It probably won't affect the shares, as it's temporary and relates to the past, said Choi, who rates the stock "buy."

Matsushita, of Osaka, Japan, will discuss replacement costs with Nokia, said Akira Kadota, a spokesman in Tokyo.

Shares of Nokia fell 64 cents, or 2.1 percent, to $29.84, on the New York Stock Exchange.

"The supplier is responsible for quality," said Arja Suominen, a Nokia spokeswoman. It's too early to estimate the potential cost or how many batteries will be replaced, she said.

Nokia said some of the BL-5C batteries may overheat because of a short circuit while they are being charged. Consumers with the batteries can ask for replacements, Nokia said.

Nokia had a global market share of 39.1 percent in the second quarter, followed by Samsung Electronics with 14.5 percent and Motorola with 13.8 percent, according to researcher Strategy Analytics.

Of the 46 million batteries potentially affected, about 160,000 were sold in Japan, according to a joint statement by Matsushita, Nokia Japan and cellphone service providers.

Nokia batteries cost $24.95 to $59.95 in the United States, the U.S. Web site showed.

Juho Erkheikki in Helsinki and Masaki Kondo in Tokyo contributed to this report.