Dell: Sony to Keep Supplying Batteries

Dell Inc. Chairman Michael Dell said Sony Corp. will continue to supply batteries to the computer maker, despite a massive recent recall.

He also said Friday that a probe into the company's accounting by the U.S. Securities and Exchange Commission will not make "any material difference in our financials."

The world's largest computer maker by shipments said earlier it has been cooperating with the SEC since August 2005 on an informal investigation of its accounting practices, including how the company booked its revenue in past years.

Earlier this week, Dell also said it recalled 4.1 million potentially flammable batteries supplied by Sony Corp. for laptop computers.

"We have worked extensively with Sony to ensure that they have made the right changes in their process. Based on the improvements that they've made, and measures that they have taken, we believe they can continue to be one of the suppliers of batteries to us," Dell told a press conference in Hong Kong.

Asked how demand for personal computers was shaping up in the third quarter, Dell said demand is "OK" but did not elaborate further.

Dell, who's also the computer maker's founder, blamed "aggressive pricing pressures" for its tepid second-quarter earnings.

On Thursday, Dell said its second-quarter net profit was down 51 percent to $502 million from a year ago.

He said the company will have to "adjust its pricing strategy," without providing specific details.

Steve Felice, president of Dell's Asia-Pacific operations, said separately Friday that the computer maker lowered prices "more than necessary."

"What we're doing about that is just honing some of the pricing modeling we're using and methodology to make sure we're being aggressive in the right spot and being more prudent on how we manage margins," he said.

Felice also said Dell had a "very strong" quarter in the Asia-Pacific region, with revenue growing 17 percent.


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