What Would It Cost Apple To Recall The iPhone 4?

Chatter over Consumer Reports revoking their recommendation of the iPhone 4 has spurred many a debate over whether or not Apple should recall the latest iPhone. The likelihood of such a massive recall would not only tarnish Apple’s reputation but it would cost an estimated $1.5 billion, says Bernstein Research analyst Toni Sacconaghi.

“It could be done immediately, would directly address the Consumer Report’s concern, and would be financially immaterial,” Sacconaghi wrote. “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.”

While “PR experts” or “crisis management experts” can mouth off all they want about what Apple should do, the fact of the matter is they won’t recall the iPhone 4 unless it starts to catch on fire or explode. The software patch that Apple promised in its open letter earlier this month will only remedy the 2-year-old reception display issues and not the apparent hardware issue causing reception woes. A cheaper alternative than handing over 3.5 percent of its cash on hand would be to issue free bumper cases, which would only cost $1 per unit.

In the grand scheme of things Apple’s ego could potentially alienate current and future customers with the way it’s handled multiple major events of the last few years.

(More on Techland: How To Fix iPhone 4 Reception Issues With Scotch Tape)

“Perhaps the bigger, longer-term concern for Apple investors is the emerging pattern of hubris that the company has displayed, which has increasingly pitted competitors (and regulators) against the company, and risks alienating customers over time,” Sacconaghi wrote. “Examples of its behavior have included its limited disclosure practices, its attack on Adobe’s Flash, its investigation into its lost iPhone prototype, its restrictions on app development, and its ostensibly dismissive characterizations of the iPhone’s antenna issues. The worry is that collectively, these issues may, over time, begin to impact consumers’ perceptions of Apple, undermining its enormous prevailing commercial success.”

For what it’s worth, I have yet to replicate any reception issues with the unit I received, but I am having battery issues.

More on Techland:

The Next iPod Touch Should Just Be An AT&T-less iPhone 4

Techland’s iPhone 4 Review

Video Sex Calling Services Popping Up For iPhone 4

charlieromeobravo

Apple’s response to this cracks me up. Apple has ALWAYS behaved like this. I really like their products now but their attitude has always outpaced the value and quality of their products. Even now that’s the case. Their users pay a premium price and generally get a premium product with premium service. Unless it’s a product flaw, then you get really obtuse responses to questions. One would think that after all these years, Apple would see a story like “Iphone 4 drops calls if you hold it in your left hand” and know that they need to get way ahead of it ASAP because there’s no way that it’s going to just go away.
http://dew98.wordpress.com dew98

As a Newton user in the early 90s, I have first hand experience with the way Apple handles these problems. Total denial of any problem is its standard reaction.
I’m a Mac user and I love its products, but there is a nasty self serving streak in it’s philosophy that shows itself in the rare occasions that a new product is found to have a serious flaw. For all the success, for all the gloss, for all the carefully managed public image, there is a serious cancer hidden within. I hope this time it will fix the problem fast and for the initial purchasers, not just for those who buy the modified model. I hope they do the right thing, whatever it costs, and quickly. Re-think the corporate mindset about product issues now. I live in hope!
http://figerrific.wordpress.com/ figerrific

I don’t think Apple will issue a recall. Apple has marketed themselves as Edisonian in their meticulous genius, crafting these devices to perfection and selling it as such If they were to issue a recall it could undo the image they’ve successfully projected for the last decade.
If anything they’ll quietly fix the hardware in the next batch of phones, and pull in defective ones at the genius bar to be replaced with the new ones. It’ll turn off some customers, but nothing some marketing won’t fix. Apple has built itself too tall an ivory tower to admit any wrongs, though if they did, soon and not before overwhelming demand forced them too, I would respect them enough to get a macbook.