more on : The Odds -- Re: more on apple recall ..

[David Farber <dave () farber net>]

Begin forwarded message:

From: Simon Higgs <simon () higgs com>
Date: August 25, 2006 3:32:05 AM EDT
To: dave () farber net
Subject: Re: more on : The Odds -- Re: [IP] more on apple recall ..
Reply-To: simon () higgs com

Recalls never happen without a sound business case for them. It's a  
risk management strategy. The manufacturer weighs the risk of  
lawsuits (or similarly damaging events) versus the actual cost of the  
recall. Whichever is the cheaper route for the manufacturer is the  
route chosen.

6 million laptop batteries have a retail cost of around $774,000,000  
(based on 13" Macbook battery at $129). Assuming a manufacturing cost  
of $15 each, this is about $90,000,000. Whatever the real reasons,  
it's cheaper to pay nearly $100,000,000 in recalls than it is to  
preserve the status quo and only make payouts on the quiet.

My guess, and this is only a guess, is that this was prompted by the  
recent ban of laptops in carry-on luggage on aircraft. With a laptop  
in the cabin, if it's battery caught fire, there would be humans (and  
fire extinguishers) nearby to put out the fire. With laptops being  
carried in baggage, the risk of 20 (using Lauren's figure) in 6  
million batteries catching fire becomes only 1 in 300,000.

Given that there are about 30,000 commercial flights per day in the  
US (and about 5,000 airborne at any given moment), it's not too far  
fetched to assume that eventually an unattended battery fire will  
bring down a commercial airliner. Or two. That's the risk that  
exceeds $100,000,000 and was what prompted (I think) the recall.

Simon


David Farber wrote:
> Begin forwarded message:
> From: Lauren Weinstein <lauren () vortex com>
> Date: August 24, 2006 4:17:00 PM EDT
> To: dave () farber net
> Cc: lauren () vortex com
> Subject: The Odds -- Re: [IP] more on apple recall ..
> Dave, not to downplay the seriousness of fires or even slightly
> singed laps, but it never hurts to look more closely at the numbers.
> According to the media reports, between Dell and Apple we're talking
> about around 6 million notebook batteries, and (at least based
> on the current U.S. figures I've seen) under 20 total cases of
> overheating (and far fewer actual fires).  Of course, there's
> always the risk of future events related to these batteries, many
> of which have been in use for quite some time.
> But still, do the math and it appears that the odds of getting
> "burned" by one of these batteries is pretty damn low, *much* lower
> than the odds of many other bad things happening (see
> http://www.funny2.com/odds.htm ).
> This isn't to say that defective products are a good thing, but
> trying to keep such risks in perspective is a useful exercise.
> --Lauren--
> Lauren Weinstein
> lauren () vortex com or lauren () pfir org
> Tel: +1 (818) 225-2800
> http://www.pfir.org/lauren
> Co-Founder, PFIR
>    - People For Internet Responsibility - http://www.pfir.org
> Co-Founder, IOIC
>    - International Open Internet Coalition - http://www.ioic.net
> Moderator, PRIVACY Forum - http://www.vortex.com
> Member, ACM Committee on Computers and Public Policy
> Lauren's Blog: http://lauren.vortex.com
> DayThink: http://daythink.vortex.com
> -------------------------------------
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--
Best Regards,

Simon Higgs


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