When Apple released its MacBook Pro laptop, reviewers called it an evolutionary improvement and touted its new GeForce 8600 GT mobile graphics processor, made by Santa Clara, Calif.-based Nvidia. Now some models may have faulty chips.
After months of speculation that the MacBook Pro included failing Nvidia chips, Apple finally said Thursday that three MacBook Pro models manufactured between May 2007 and September 2008, including the 15-inch, 17-inch and Early 2008, may have faulty chips.
But Apple said it was not at fault in a note posted on its MacBook Pro Web site. The company said Nvidia told Apple that Mac computers with the graphics processors were not affected.
It was not until its own investigation that Apple determined some MacBook Pro computers with the GeForce processors were affected.
"Our analysis shows that a failure in an Apple MacBook Pro notebook is remote," Nvidia spokesperson Derek Perez said in an e-mail. "However, Apple, like other OEMs, decides on their own how to handle their warranty and repair programs, based upon their own quality standards. Regardless, we stand by our products, thus the reason why we set aside such a large reserve, and we have and will continue to work closely with Apple and their customers."
Extended Warranty
MacBook Pro users, according to Apple, need to check their systems for distorted or scrambled video or the absence of video when the computer is running.
"If the Nvidia graphics processor in your MacBook Pro has failed, or fails within two years of the original date of purchase, a repair will be done free of charge, even if your MacBook Pro is out of warranty," Apple said.
Owners of affected MacBook Pros are asked to bring them to an Apple retail store or Apple authorized service provider. Customers who already paid for repairs to the MacBook Pro as a result of the faulty chip will get a refund, according to Apple.
Nvidia in Hot Water
Last month, Nvidia was hit with a class-action lawsuit by investors who bought its common stock between Nov. 8, 2007, and July 2, 2008, according the U.S. Securities and Exchange Commission. Shareholders say Nvidia; Marvin Burkett, its chief financial officer; and Jen-Hsun Huang, its chief executive officer, violated federal securities laws by hiding the chip defect for eight months and therefore committed fraud against the shareholders.
Nvidia's stock plunged 31 percent from $18.78 on July 2 to $12.98 on July 3 after Nvidia announced it would take a one-time charge of up to $200 million to cover warranty costs related to the failing chips. The drop cut Nvidia's market capitalization by $3 billion overnight, according to the law firm of Dreier LLP, which represents shareholders.
In an effort to restore its financial performance, Nvidia last month announced it would eliminate approximately 360 positions worldwide, or about 6.5 percent of its global workforce. The reduction is expected to be completed by the end of the third quarter of its fiscal year, which ends Oct. 26.
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