The recall, the largest ever in the consumer-electronics industry, will boost production, shipping and marketing expenses by $200 million, Roger Kay, an analyst at Endpoint Technologies Associates, estimated. UBS analyst Benjamin Reitzes and Cindy Shaw at Moors & Cabot predict the cost may hit $400 million.

"They need to turn their shipping operation into a massive relief operation," said Kay, who is based in Wayland, Mass. "It's almost like going to war."

Customers began calling the company and going to a special Web site Tuesday to order replacements. Orders were being filled on a first-come, first-served basis, spokesman Ira Williams said. He couldn't estimate how long customers might have to wait. It could vary by the model of their notebook, he said.

Dell said it received more than 100,000 calls, 23 million Web site hits and 77,000 orders by late in the day.

Sony will share the costs, and Dell Chairman Michael Dell said Tuesday the returns are unlikely to have a material effect on earnings at the world's largest personal computer maker. The recall is a setback for both companies' efforts to revive demand for their products.

The Dell batteries were used in Latitude, Inspiron and Dell Precision portable PCs sold from April 2004 to July 18, 2006. Dell will ship new batteries to owners of affected computers, Dell Senior Vice President Alexander Gruzen said.

Round Rock-based Dell has increased production and is working three shifts a day to resolve the problem, Gruzen said. Meantime, owners should use power cords, he said.

By: DocMemory
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