A full recall of the iPhone 4 to fix antenna issues could cost Apple $1.5 billion, a Wall Street analyst told investors Wednesday. However, don’t expect such an event, he adds. Instead, Bernstein Research analyst Toni Sacconaghi joins others suggesting the Cupertino, Calif. company could quiet the complaints by giving away a $2 rubber case.
A larger potential hit to Apple’s bottom-line is what Sacconaghi describes as “the emerging pattern of hubris that the company has displayed.”
If Apple doesn’t go along with the analyst’s suggestion of giving free bumpers to prevent the dropped-call annoyance, the company could opt for either in-store fixes or a wider recall, both with different price tags. Assuming Apple sold $6 million iPhone 4s, an in-store fix would cost $75 per handset, or $450 million. Using the same sales assumption, a full recall would cost $250 per iPhone, or $1.5 billion, he wrote.
But ‘antenna-gate’ may be small potatoes compared to the signals Apple is sending to consumers, he writes. The examples include refusing to talk about Jobs’ health, attacking Adobe, the lost iPhone prototype investigation, restricting app developers and the early poo-pooing of iPhone antenna problems.
“The worry is that collectively these issues may over time begin to impact consumers’ perceptions of Apple, undermining its enormous prevailing commercial success,” the analysts warns.
[Barron’s]
