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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. mortopher's Avatar
      mortopher -
      It's still sickening that it'd only be 3.5% of Steve's big green blanket.
    1. plcrules's Avatar
      plcrules -
      how much would it cost for every1 2 get a free bumper?
      and i think we might b seeing the first sign of apples down fall
    1. iPhoneApps's Avatar
      iPhoneApps -
      Apple surely has to say something sometime soon about all this. Really curious what they say or do or don't do...

      I have a feeling they are going to question Consumer Reports testing methods. Hilarious.

      The official release day was blown up I wonder what a nightmare it will be for people to go through this recall. If there is one.
    1. ctrobins's Avatar
      ctrobins -
      An 'Apple' branded strip of duct tape would cost less than $1.5 Billion.
    1. lunercrab's Avatar
      lunercrab -
      Man I'm so ready to finally order my iphone 4. But I'm really wondering if that's suck a wise decision at this time
    1. TheOnlyest's Avatar
      TheOnlyest -
      I know greed kills... but hopefully and FINALLY, arrogance will kill Steve Jobs and crApple!!!
    1. techknott's Avatar
      techknott -
      1.5 billion is considerably less than the amount thats been recently wiped from Apple shares.
    1. bobright's Avatar
      bobright -
      When is the few weeks deadline that this supposed fix itunes update should hit? Just curious
    1. isanta's Avatar
      isanta -
      If you are going to buy a
      case and you do not hold the phone by the left corner than you should just buy it. Other then the death grip the iPhone
      4 is great.
    1. redwolf's Avatar
      redwolf -
      Quote Originally Posted by lunercrab View Post
      Man I'm so ready to finally order my iphone 4. But I'm really wondering if that's suck a wise decision at this time
      me too... i'm holding my cash with the Death Grip
    1. iSteed's Avatar
      iSteed -
      I personally think the bumper thing can't be that big of a deal. Give a bumper to the people with concerns... Add something to manufacturing process that coats the antennas which would not change it's design or performance and acknowledge the problem to make everyone happy again. I love apples products. They need to fix this
    1. ianbroste's Avatar
      ianbroste -
      3.5% isn't very much especially when you are considering that is just of CASH ON HAND!! I'm not having any problems with my iPhone 4 but they need to recall them before 1. They sell anymore iPhone 4s and 2. Their quality product image is severely tarnished.
    1. sal_osx's Avatar
      sal_osx -
      I honestly think that this is being blown way out of proportion. There will always be people who find something to complain about.
    1. MikeThomson's Avatar
      MikeThomson -
      Quote Originally Posted by isanta View Post
      If you are going to buy a
      case and you do not hold the phone by the left corner than you should just buy it. Other then the death grip the iPhone
      4 is great.
      Why do people think like this!

      You should not have to have a bumper/case or ever worry about how your holding your cellphone.. there ment to be held in your HAND!

      i should be able to hold the damn thing with both hands and dial with my nose and have no problems!!
    1. gonzok's Avatar
      gonzok -
      I plan on getting a case (when Seidio comes out with theirs) so I'm not too concerned about the death grip issue, but what about the proximity sensor issue. Nobody seems to be talking about it. It is impossible to hold the iPhone 4 on your shoulder without the display becoming active and buttons being pressed.

      I have had every gen iPhone and this is the only one that does this. The Apple "genius" just blew it off when I asked him about it.

      Hopefully it will be addressed in a firmware update.
    1. Yosagi's Avatar
      Yosagi -
      I dont like bumpers and cases for cell phones, I love the way the way the phone feels naked in my hand/pocket alone. I take such good care of my phones I can easily go 3+ years with an iphone totally unprotected, even the screen, without a single scratch on it anywhere.

      So that being said, if I was experiencing reception issues with my i4, and apple could not fix it, I would never buy another phone from apple again. I really think their choice of money over customer loyalty is going to absolutely destroy them this generation. There will simply be too many jaded apple fanboys to ever consider buying them again, this is seriously a huge stab in the back. People can ignore apples fascist policies and sweatshop manufacturing practices because it doesnt have too much of a tangible impact on them. But the PHONE itself simply must work at all times, people will get a bad taste in their mouths right away when it does not.
    1. MooShoo's Avatar
      MooShoo -
      Quote Originally Posted by plcrules View Post
      how much would it cost for every1 2 get a free bumper?
      and i think we might b seeing the first sign of apples down fall

      Does it actually take longer to think about typing everyone "every1" , to "2" and be "b"?

      Just want to know if you ever have to backspace and correct yourself when you are trying to be cute and actually spell out a word and realize, "Oh, I need to be funny and make be-b and to-2 and etc etc.

      Just curious. I find it annoying to read posts from a 5 yr old. Sorry.

      Back on track--------

      Apple needs to do the right thing and do the recall and keep their image of their products.
    1. mmg's Avatar
      mmg -
      I seem to be part of a small minority who have no problems with the phone? Me and my wife have the new phone and neither of us have had a problem, touch wood! I still love it
    1. Rokesomesmeefer's Avatar
      Rokesomesmeefer -
      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.
      Do you think this would be the case if Apple would simply own up to the problem and promised to fix it somehow?
    1. LuisAKANewt's Avatar
      LuisAKANewt -
      well apple really messed up lets see if they will make it better next year iphone 5!!