Nokia Corp said yesterday that Matsushita Battery would meet all costs related to a warning earlier this month about faulty batteries.
Matsushita said separately that the estimated cost of replacing the batteries would be between ?10 billion and ?20 billion (US$85 million and US$170 million).
Nokia, the world's biggest mobile phone maker, advised customers on Aug. 14 that up to 46 million batteries used in its handsets could pose a risk of overheating. The advisory applied to Nokia BL-5C batteries made by Matsushita Battery Industrial Co between December 2005 and last November at its production facilities in Zhuhai, China.
"Matsushita Battery has agreed to cover the direct costs associated with the product advisory, including, among other things, logistics costs, call center costs, and replacement battery costs," Masatsugu Kondo, president of Matsushita Battery, said in a statement issued by Nokia.
Nokia said that 100 incidents of overheating of the Matsushita-made batteries had been reported worldwide, but that there had been no serious injuries or damage. All cases of overheating occurred during charging, it said.
Nokia did not issue a recall of the batteries but will replace any battery covered by the advisory.
Nokia said it would continue to cooperate with Matsushita.
"We are pleased with the good cooperation between Nokia and Matsushita. Together we aim to serve consumers in the best possible manner and minimize the inconvenience this issue could cause them," said Robert Andersson from Nokia's customer and market operations.
Matsushita is one of several suppliers that have together made some 300 million lithium-ion BL-5C batteries used in 14 Nokia handset models.
Nokia sells products in 130 countries and employs 110,000 people worldwide. In the second quarter, it sold 100 million mobile devices accounting for 37 percent of the global market share, according to technology research group Gartner Inc -- up from 34 percent a year earlier.