The Cost to Apple for Recalling Reception-Challenged iPhone 4, Should It Decide To Do So

Jul 15, 2010  •  Post A Comment

After Consumer Reports’ said Monday it couldn’t recommend Apple’s iPhone 4 because of a reception problem, rumors began that Apple might recall its latest smart-phone. The cost of such a move? A mere $1.5 billion, according to an analyst’s estimate, the Los Angeles Times reports. 

A record 1.7 million iPhone 4s were sold in the three days after the product hit the stores, but immediately consumers started complaining that the device’s reception dropped significantly when held a certain way. "Apple’s image — and potentially iPhone sales — could be compromised if Apple does not explicitly — and constructively — address the issue of what it believes is wrong with the phone and how it will address it," wrote Bernstein Research analyst Toni Sacconaghi in a report, the article says.

Although the analyst pegs a full product recall as "highly unlikely," it could cost the company $1.5 billion, or 3.5% of its cash balance, the story says. Instead, Sacconaghi recommended that Apple issue free bumpers, which are essentially a case, which would help fix the problem and cost the company $1 or less per phone, the story says. Apple didn’t respond to requests for comment, the article adds.


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