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  • Bernstein Research Places iPhone 4 Recall Price Tag at $1.5 Billion



    If there is any reason why Apple isn't going to recall the iPhone 4, it may be because of this. According to the calculations presented by Bernstein Research analyst Toni Sacconaghi, embarking on a full product recall would cost an estimated $1.5 billion. And while many are calling on Apple to "do the right thing" and fix the problem before consumer frustrations and corporate image problems are allowed to simmer any longer, it now appears that the cost of a recall would be substantial enough to ensure that cries for a recall will continue to fall on deaf ears.

    The prospect of an iPhone 4 recall seemed outlandish and almost unimaginable until Consumer Reports tore into Apple over its lingering antenna issue and effectively pulled its recommendation for the hugely popular smartphone. In the last twenty-four hours, everyone from prominent media organizations to small tech blogs have broached the subject of a possible recall. On Tuesday afternoon, Sacconaghi put the cost of a recall into perspective by estimating that it could run Apple some 3.5 percent of its total cash on hand.

    It could be done immediately, would directly address the Consumer Report's concern, and would be financially immaterial. While it would force Apple to 'acknowledge' a design issue with the iPhone, we believe that consumers are increasingly aware of the antenna issue, and remedying it rather than dismissing or ignoring it appears most appropriate.
    Of course, the biggest problem facing Apple isn't the impact of the "Death Grip" on current iPhone 4 sales. The device is already a huge success. The real and much deeper problem relates to the future of Apple and its product releases. "Perhaps the bigger, longer-term concern for Apple investors is the emerging pattern of hubris that the company has displayed," says Sacconaghi, "which has increasingly pitted competitors (and regulators) against the company, and risks alienating customers over time."

    CNET
    This article was originally published in forum thread: Bernstein Research Places iPhone 4 Recall Price Tag at $1.5 Billion started by Michael Essany View original post
    Comments 145 Comments
    1. allanes5's Avatar
      allanes5 -
      Apple needs to say something!!!!!
    1. Rokesomesmeefer's Avatar
      Rokesomesmeefer -
      Quote Originally Posted by allanes5 View Post
      Apple needs to say something!!!!!
      Indeed. I'm starting to think Apple learned how to respond by watching G.W.B.'s initial response to the 9/11 attacks...
    1. andrewe13's Avatar
      andrewe13 -
      Anyone think they are "releasing a software update IN A FEW WEEKS" to make people who are waiting out on it, pass the 30day mark on returning it and have to pretty much deal w/ what they got ? Dragging it on to pass the return date on the receipt......
    1. Rokesomesmeefer's Avatar
      Rokesomesmeefer -
      Quote Originally Posted by andrewe13 View Post
      Anyone think they are "releasing a software update IN A FEW WEEKS" to make people who are waiting out on it, pass the 30day mark on returning it and have to pretty much deal w/ what they got ? Dragging it on to pass the return date on the receipt......
      If that's the case, they will also be adding significant legal fees to the budget that they'll ultimately be setting aside to fix this PR nightmare.
    1. grbspltt's Avatar
      grbspltt -
      I don't have a problem with the death grip, I do notice bars going down when I hold it in that area of the phone, but it's avoidable. What's really, really, really annoying is the crappy proximity sensor. I have hung up on 20+ people with my face while talking on the phone. If there's a reason to have a recall it's this. Unless it's a software bug then fix it with an update. But as of right now I'm definitely going to reconsider buying the next iteration of the iPhone on the first day like I have since Gen 1. Hell I'm even thinking about checking out the Windoze Phone 7. Just to see what it's all about.
    1. maddawg05's Avatar
      maddawg05 -
      Quote Originally Posted by sal_osx View Post
      I honestly think that this is being blown way out of proportion. There will always be people who find something to complain about.
      Are you serious man? You try waiting for something you REALLY want and getting it and it's got defects. Stop being ignorant. And no....my ip4 doesn't have any issues. Look at the sources, Consumer Reports...pulling their recommendation for a product IS a big deal. Doesn't happen all the time.

      On another note...bring on the jailbreak
    1. QuinnNebula's Avatar
      QuinnNebula -
      they won't do a recall....they are to greedy to do that
    1. tudtran's Avatar
      tudtran -
      That's a big number. Their market capital is @ 229 billions. Apple advertised their products to be best designed. Eventhough that's a huge number but apple won't go broke.
    1. aidensocal's Avatar
      aidensocal -
      I hold my phone in the bottom left and nothing happens? No case on it and sometimes my signal bars actually go up when I hold it there? Maybe my phone is dysfunctional?
    1. kuhndsn's Avatar
      kuhndsn -
      Quote Originally Posted by TheOnlyest View Post
      I know greed kills... but hopefully and FINALLY, arrogance will kill Steve Jobs and crApple!!!
      How rude. Wishing death is a little overboard. And just a FYI for you non financial followers. Steves pay check is a whole $1. On the CEO corporate side of thing in relation most CEOs profit on corporate earnings and a fat salary. While I do agree that this should be addressed wishing death is just a little extreme. That is unless you live in afghan, Iran, or north Korea... Then chop chop as you wish. However this is the USA. And this is a computer. Not some life support system.

      Grow up pls. Hate only sparks more hate. Does not solve the reception issues.
    1. geoffe's Avatar
      geoffe -
      I wonder if South Park will do an episode in the fall on the troubles of the iPhone 4?
      Also what will Apple make us do during the recall? Will they issue a new phone? The 30 day return is coming up quick for many of us...
    1. Mushy4u's Avatar
      Mushy4u -
      Its a great phone. I dont give a **** if when I cup the entire thing with both hands it loses signal. I use my right hand to talk. Use a bumber if you like to cry. Or even go buy another phone.....every phone has problems. You dont see other phones recalling when they have a problem.
    1. Rokesomesmeefer's Avatar
      Rokesomesmeefer -
      Quote Originally Posted by kuhndsn View Post
      How rude. Wishing death is a little overboard. And just a FYI for you non financial followers. Steves pay check is a whole $1. On the CEO corporate side of thing in relation most CEOs profit on corporate earnings and a fat salary. While I do agree that this should be addressed wishing death is just a little extreme. That is unless you live in afghan, Iran, or north Korea... Then chop chop as you wish. However this is the USA. And this is a computer. Not some life support system.

      Grow up pls. Hate only sparks more hate. Does not solve the reception issues.
      There's no need to wish death on them - they are already committing suicide fine enough on their own.
    1. TheOrioles33's Avatar
      TheOrioles33 -
      What would they actually do with the recalled phones? Put a bumper on it and send it back to you?
    1. Rokesomesmeefer's Avatar
      Rokesomesmeefer -
      Quote Originally Posted by Mushy4u View Post
      ...You dont see other phones recalling when they have a problem.
      A simple search on Google proves otherwise.

      cell phone recalls - Google Search
    1. Mushy4u's Avatar
      Mushy4u -
      Let me rephrase that. No one gives a rats *** about recall except iphone users. At least not to this extent. And ofcoarse your going to post a link showing me otherwise. Also, why are you commenting every 5 seconds on this thread.

      Quote Originally Posted by Rokesomesmeefer View Post
      A simple search on Google proves otherwise.

      cell phone recalls - Google Search
    1. kuhndsn's Avatar
      kuhndsn -
      Quote Originally Posted by grbspltt View Post
      I don't have a problem with the death grip, I do notice bars going down when I hold it in that area of the phone, but it's avoidable. What's really, really, really annoying is the crappy proximity sensor. I have hung up on 20+ people with my face while talking on the phone. If there's a reason to have a

      recall it's this. Unless it's a software bug then fix it with an update. But as of right now I'm definitely going to reconsider buying the next iteration of the iPhone on the first day like I have since Gen 1. Hell I'm even thinking about checking out the Windoze Phone 7. Just to see what it's all about.
      For the proximity sensor...
      Try reseting your network setting on the phone. This worked for several of my friends. If not return it for a new one. But this should work. Good luck and let me know if it works for ya.
    1. dale1v's Avatar
      dale1v -
      Quote Originally Posted by kuhndsn View Post
      How rude. Wishing death is a little overboard. And just a FYI for you non financial followers. Steves pay check is a whole $1. On the CEO corporate side of thing in relation most CEOs profit on corporate earnings and a fat salary. While I do agree that this should be addressed wishing death is just a little extreme. That is unless you live in afghan, Iran, or north Korea... Then chop chop as you wish. However this is the USA. And this is a computer. Not some life support system.

      Grow up pls. Hate only sparks more hate. Does not solve the reception issues.
      Yes, but this does not mean that he is not a millionaire from the shares he owns. Apple isn't a charity, lol.
    1. MikeThomson's Avatar
      MikeThomson -
      Quote Originally Posted by Mushy4u View Post
      Let me rephrase that. No one gives a rats *** about recall except iphone users. At least not to this extent. And ofcoarse your going to post a link showing me otherwise. Also, why are you commenting every 5 seconds on this thread.
      did you go and create an account just to be a douchbag??
    1. kuhndsn's Avatar
      kuhndsn -
      Quote Originally Posted by Rokesomesmeefer View Post
      A simple search on Google proves otherwise.

      cell phone recalls - Google Search

      Interesting... I did the search... Phones blowing up by the ear, melting battery, microwave issues...
      Safety seems to be the driving factor.