Analyst: iPhone 4 recall would cost Apple US$1.5 billion

iphone 4 cases“In the wake of Consumer Reports announcing that it would not be recommending the iPhone 4 due to the much-discussed antenna problems, there have been calls for Apple to recall the device,” Erica Ogg reports for CNET.

MacDailyNews Take: Who exactly is calling for Apple to recall the device?

Ogg continues, “While a recall could be damaging to Apple’s reputation, it would also be a costly endeavor, according to some calculations made by Bernstein Research analyst Toni Sacconaghi. In a research note on Tuesday, Sacconaghi estimated that while ‘a full product recall of the iPhone 4 (is) highly unlikely,’ it would cost Apple $1.5 billion, or 3.5 percent of its total cash on hand.”

“What would be more likely–and cheaper–is that Apple could issue a free rubber bumper case with each phone,” Ogg reports. “That would prevent a person’s hand from coming into contact with the phone’s antenna, which is built into its exterior metal strip. Although Apple charges $29 at retail for the rubber cases, Bernstein estimates that giving them away to iPhone 4 customers would cost the company $1 per unit.”

Full article here.

MacDailyNews Take: Drive down the price of AAPL shortly before earnings are reported by whatever means necessary, so that when it pops, you rake in a tidy profit. Rinse, lather, repeat; four times per year, at least. It’s just like stealing, but without the jail time.

49 Comments

  1. I am so confused. Why loose confidence in cr when it is apple and AT&T;having issues with apples new phone younshould be happy you r not stuck with a garbage product if there is a recall wouldn’t it be nice if vista was recalled lol

  2. Given the problems I’ve seen on over 30 iPhone 4s in the UK, I have to say that I wouldn’t be surprised to see an iPhone 4 recall.

    To give an example … we have some friends in Surrey … husband and wife have brand new iPhone 4s, while their 2 kids have VERY CHEAP Nokia / Samsung phones – the whole family is on O2. Guess who has the best reception in their home? It’s the kids … their phones cost £60 while their parents wonderful new iPhones cost £1100. Sometimes their parents have to call each other up to 6 times to connect! … and their previous iPhones were 3Gs – they never had a problem, ever.

    MDN and Apple may be in denial over this issue, but it will have to be resolved before a class action lawsuit is served on Apple.

    And … I see no reason why Apple couldn’t spin this irritating problem to their advantage.

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