Analyst: Total recall of the iPhone 4 could cost $900 million

Kate O'Brien

July 14, 2010 11:10am

More talk around this much talked about Apple iPhone 4 antenna issues. RBC Capital Markets Analyst Mike Abramsky says that if Apple goes the route of doing a “broad repair scenario, or even a full recall” of the iPhone 4 it could cost upwards of $900 million… to which he said “Apple can easily afford it”. In a report Abramsky pointed out that if the antenna issue effects 100% of iPhone 4 users Apple has 3 possible scenarios:

1. Provide cases (Bumpers) to 3 million people would cost $45 million
2. Repair 3 million iPhone 4 handsets would cost $300 million
3. A complete recall of the iPhone 4 would cost $900 million

Apple has not confirmed that a recall is going to happen. Abramsky stated that regardless of what Apple decides to do “We expect iPhone 4 demand may rebound quickly, still outpacing supply and – along with global channel fill – may mitigate possible near-term slowdown in sell-through. The issue, in our opinion, is likely to blow over with media and consumers refocusing on iPhone 4’s appeal, market opportunity and strong demand.”

Via: Apple Insider

  • RJay

    good article, i will still be picking one up despide the one issue, i was planning on buying a bumper anyway

  • wiley

    Every bit of bad news or article about iPhone 4 problems is free advertising for Android based phones.

  • Randy – 1

    At the key note address a few months ago, Steve Jobs went on and on about how decidedly beautiful the iPhone 4 was with its stainless steel band and glass front & back. He likened it to the grace and beauty of the old style Leica camera; and he’s not wrong. It is an aesthetically pleasing device to be sure.

    So, because of a hardware design flaw, now everyone is supposed to go out and buy (or perhaps be given by Apple) a $30 neon pink rubber band to wrap around it? So much for beauty, class and elegance.

  • RJay

    have you seen the white phone with the black bumper? or vice versa? there still classey

  • Preacher

    the flaw had brought to light the weakness in AT&T network in the USA.
    i wounder how the canadian networks will do.

  • toysandme

    “Provide cases (Bumpers) to 3 million people would cost $45 million”

    So much for the value of that “ANAL-ist”. These bumpers can’t possibly cost more than a couple of pennies each, so Apple’s cost would be $60,000.

    Search “iphone 4 case” on eBay, then sort the 55,000 hits by Price+shipping lowest first, and you will find plenty of them at one penny, with free shipping from China!

  • jim

    AFFECTS not effects in the first paragraph. Who, if anyone, edits/proofreads your articles? Or does nobody know English any longer?

  • RJay

    @Preacher

    I wonder as well, our signal strength is alot better the att’s is. im curious if we will notice a difference

  • Wikky

    That’s a great comment, who’s to say that the Canadian providers will still have the same reception issues as our poor US counterparts.

    I’m sure Rogers/BellTelus would have a massive advertising ware if one provider was able to prove better reception than the others.

    Not picking an iPhone up, waiting for the new GalaxyS/Vibrant.

  • Faruk

    Preacher:

    AT&T’s problem is poor coverage. Apple’s problem is that the phone DROPS its connection once you touch it in the wrong place, regardless of whether you have a strong or weak signal.

    It’s really stupid how Apple fanboys like to bash AT&T for the issue when it’s really Apple’s problem. Oh well.. it’s only a matter of time until somebody outside of the USA tests this and uploads the results to youtube.

  • Labrat

    I think AT&T is not to blame here.

    If you have weak reception, when you gap the seam, you loose 20Db. If you are anywhere under 90Db, you can expect degradation of speed / dropped calls.

    If you have excellent reception then this is not an issue.

    We all know Apple solution will cost them a few thousand $. Ignore, do press releases that says nothing is wrong, delete post on their forum and finally wait for some more iSheep to show up.

    The fix is in the works, it’s called iPhone 5, you should see it in a year or so.

  • Jason Bayer

    @ Labrat

    LOL. the fix = iPhone 5. Coming June 2011. It sounds funny, but its also true.

    On topic: Now I believe that if Apple was a decent company, they would obviously pick the cheapest and best way out of this mess, just ship every iPhone 4 with a free bumper case inside the box. And for those who already have an iPhone 4 and no bumper case, send them a free one, and for those who already have a bumper case, refund them their $30 for the case. Problem solved Apple…its soo simple its business ethics 101 for christ sake. Just go live, admit the flaw, talk about how your improving it, and talk about how your going to fix it (free bumpers).

    You’ll see your stocks rise again, which since this antenna issue has occured, their stocks have dropped 14.26 points. And everyone will be back in the iPhone 4 hype train when it launches in Canada and the other countries as well.

    THIS IS SO SIMPLE!!! Apple = Slow/Money Grabbing Company

  • Larry

    Give away a bumper.The cost is minamil to Apple plus it will protect the phone.

  • nagne

    If it’s only AT&T’s problem, how come all the other phones from AT&T do not have any issues with call drops? Both AT&T and Apple are responsible for this failure. AT&T’s weak signal + Apple’s stupidly designed antennae.