Sony Corp. has seen about 15 percent of its market value wiped out since the battery problems first surfaced in August, undermining its reputation for quality and setting back its recovery from a profit slump.
Sony shares slumped a further 150 yen or 3.26 percent Wednesday, closing at a fresh 10-month low of 4,450. The market has finally begun to price in the negative impact on earnings from the battery recalls, said Standard and Poor's equity analyst John Yang.
Sony said in August that it expected to incur costs of $257 million from the recalls but analysts say that the figure is likely to be even higher after the company last week launched a global replacement program.
Fujitsu said Wednesday that it will recall 287,000 Sony-made laptop battery packs, following the lead of Apple Computer, Dell, Toshiba, and China's Lenovo.
It is not the first time that Sony has been stung by technical problems. In 2003, the company was forced to recall a popular range of digital cameras due to battery defects, followed by 340,000 television sets.
Last year, Sony recalled 3.6 million adaptors for its popular PlayStation 2 game console worldwide because of a risk of injury from overheating as well as 16,000 liquid crystal display televisions sold in Japan due to a default.
"These recalls happen every year so I think quality issues are also creating the weakness in the share price," said Yang. "Also I think people are skeptical about the PlayStation 3 - is it hype or will it really drive earnings."
Welsh-born Stringer's appointment in March last year as Sony chief executive sent ripples through Japanese boardrooms but he quickly won over investors, vowing to fight like Sony warriors to arrest a dramatic profit slump.
He scored an early victory this April after reporting better-than-expected full-year profits driven by rising sales of sleek new flat-panel televisions, but some analysts are now taking the eraser to their earnings forecasts.
If large losses in the game business continue next term, market expectations of sustainable profits there may fall back further, warned Goldman Sachs electronics analyst Yuji Fujimori.
The US investment bank lowered its estimate for the company's operating profit over the year to March 2007 to 100 billion yen from 200 billion. Sony has forecast a figure of 130 billion yen.
Sony has long dominated the home videogame market and shipments of the PlayStation 2 console have topped 100 million since March 2000. Sony aims to ship 6 million PS3 consoles globally in the fiscal year to March 2007 and still has a solid customer base, particularly in Japan.
However, Nintendo leads the global market in portable game machines and is taking aim at Sony's lead in stand-alone consoles by promoting its new machine, Wii (pronounced 'We'), as a family-friendly machine.
Famous for the way that it changed how the world listened to music with its Walkman portable players, Sony lost its way as competitors cashed in on fresh concepts such as Apple's iPod digital music player.
Sony was forced to delay the global launch of the PS3 by about six months until November this year, giving Microsoft's Xbox 360 a one-year head start. Earlier this month it pushed back the PS3 rollout in Europe, Russia, the Middle East, Africa, and Australasia again until March.
Facing stiff competition from the Xbox 360 and Nintendo's Wii, Sony last month slashed the price tag of the PS3 by one-fifth in Japan amid complaints that it was too expensive.
The electronics icon is also gearing up for a tough battle with rival manufacturers including Toshiba to set the standard in high-definition DVDs, in a replay of the VHS-Betamax video cassette fight in the late 1970s.
Sony announced this week that its new Blu-ray DVD player-recorder will hit the shelves December 8 but a high price tag and confusion over the two different formats may put off many consumers initially, analysts say.
"It's not going to be a flop but it's going to be a very challenging market, not just for Sony but for the Blu-ray camp," said Yang.
© 2006 Agence France-Presse
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