It’s been an expensive week for Apple

As President Reagan was once noted to observe ‘ a billion here, a billion there, and pretty soon we’re talking real money’. Well, though not quite in the same league, it’s been one of those weeks for Apple. Having to dig deep into its $9.2bn coffers not once but twice this week. But it probably won’t make too much of a difference in the long run – in fact it will be considered money well spent.

Apple’s settlement with Creative was the first dip into the coffers, with a $100mn out of court ‘once off’ settlement agreed. We discussed in a previous article (here) why this was probably a good thing for Apple.

Now following hot on the heal of that announcement comes one about the recall of batteries – similar to Dell’s problem, but thankfully for Apple, on a smaller scale. The announcement – jointly produced with the United States Consumer Product Safety Commission – states that up to 1.8 million batteries will be recalled.

The batteries were sourced from Sony just as with Dell, so we expect that Sony will be picking up much of the tab for the recall. Figures variously range from $180mn through to $270mn as the cost of the program.

Shares of Sony fell again to their lowest figure for the month. The main question for Sony is how many other vendors have used these batteries – all eyes are now looking at HP and Lenovo – if either of the two have used Sony batteries in the past this could send Sony shares down further.

For Apple it’s been an expensive week, but we suspect that its quick action and its no-nonsense approach has won it more friends.