AS PRODUCT recalls go, Dell’s is a biggy. If first estimates by analysts at UBS are to be believed, the recall of 4.1 million laptop computers will set the American IT hardware company back something in the region of $400 million (£211 million).

In the context of the $55 billion of computer sales generated by the company last year, that may appear small beer. In the context of the $3.8 billion of net income, it is more serious. But if the financial impact is no more than this, the problem of self-igniting laptops will be quite quickly forgotten.

Short-run costs incurred are not the issue. It is the impact on Dell’s long-run reputation with consumers that is worrying.

Fear of immolation may make everyone think twice about using any brand of laptop and proximity to the Atlantic bomb scares adds to the sense of edginess. Given that Sony manufactured most of the faulty Dell machines and that Apple has encountered the odd similar problem of its own, it is possible that the whole market could be contaminated. Meanwhile, the word from geekland is that it is the lithium-ion battery technology that is questionable here, rather than a particular power source carrying the imprimatur of Dell, Sony, Apple or anyone else.

Still, for fair reasons or foul, it is Dell’s business reputation that is in the line of fire and has greatest need of dousing down. Commercial history is littered with examples of branding nightmares. Remember Hoover and its free flights? Or the benzene in the Perrier? And how much better would life have been for the Mercedes A- Class if it had passed the moose swerve test? Cadbury has spent the summer tackling worries that salmonella found its way into its chocolate bars.

For every Hoover-type horror story, there are several dozen could-have-beens. A few loose words from Gerald Ratner did untold damage to the chain of jewellers he ran. But bad luck played a big part in that disaster. With tongue firmly placed in cheek, Mr Ratner made disparaging comments on several occasions before being catapulted to infamy.

Chance will play a large part in whether the flaming laptops capture the public imagination, and chance, therefore, determines the scale of the damage done to Dell. The best guess is that consumers will not fall out of love with laptops. They are too convenient to do without. Computer buyers may fall out of love with Dell, however, if further incidents follow that suggest it sells unreliable kit.

Cheap furniture is not enough

A SMALL cut in the targeted rate of inflation in July is not going to change Mervyn King’s mind about the UK inflation threat. Nor will it deter the Governor of the Bank of England from trying to curb it. The main reason for the small decline seems to be weakness in the price of one constituent of the the price index — furniture.

Mr King is anxious that, far from hitting its 2 per cent target by autumn, consumer price inflation (CPI) could hit 3 per cent, obliging him to write a grovelling letter of explanation to Gordon Brown. Interest rates were raised this month partly because CPI rose from 2.0 per cent to 2.5 per cent in two months, but mainly because the economy grew faster than expected in the second quarter and statistical revisions showed that it had been expanding faster than first thought for some while. Oil prices have been wavering back near to record highs and further rises in utility bills are guaranteed.

Somewhat higher rises in the old Retail Prices Index will not help, either. Thanks in part to house prices, RPI inflation is still up at 3.3 per cent and the RPI remains the benchmark for pay claims, for index-linked pay deals and for upping state welfare and pension rates.

Blaming ministers for insisting that tuition fees for university students should virtually double in the coming term is not likely to evoke much sympathy at the Treasury for the Bank’s predicament.

The target rate is itself in line with projections in the latest Inflation Report, which inspired Mr King to hint at 5 per cent base rates. That is what we should still expect: no less but probably no more, either.

In the pipeline

PRIVATE equity firms are not circling NTL because they are thrilled by prospects for the four-way internet, telecoms and media contracts that it is hoping to sell to consumers connected to its cable network. Intense competition in these sectors has been depressing NTL’s share price, among others. Rather, as entertainment becomes a commodity, the industry could become like gas or electricity. Owning the boring wires or pipelines is the most attractive part. Infrastructure assets, not content, has become the main attraction of NTL.

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