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.