UPDATE 3-Sony shares hit 3-yr low after Vaio laptop recall

"As far as reliability and the delay in taking action, this case links to its past lithium battery recall," the analyst said. "One would wonder if Sony would be OK when both of the businesses are expanding.

"This will likely cast a shadow over Sony's earnings targets in the medium to long run."

Sony shares shed 4.2 percent to close at 3,880 yen after touching 3,850 yen, the lowest since November 2005. The Nikkei average .N225 ended down 2.8 percent. ($1=105.90 Yen) (Reporting by Sachi Izumi; Editing by Chris Gallagher)