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The Recall Of iPhone 4 Will Cost $ 1.5 Billion Dollars

Todays Date: December 17, 2018

The analyst Toni Sacconaghi (Toni Sacconaghi) ofU.S.investment bank Bernstein Research released the Investment Report on Tuesday and said that if Apple launched the full recall of iPhone 4, it will cost $ 1.5 billion.


Authority of theU.S.consumer magazine “Consumer Reports” (Consumer Report) said on Monday, because of signal problems, so do not recommend consumers to buy iPhone 4, which led to a discussion about the recall of iPhone 4. Sacconaghi think that, the recall of iPhone 4 will not only greatly damaged Apple’s reputation, and it will have a huge cost. Sacconaghi said that despite the “full recall iPhone 4 is unlikely”, but if Apple is really doing, it will cost $ 1.5 billion in funds, accounting for 3.5% of Apple’s cash reserves. The program which more likely and also cheaper is that Apple released free rubber sleeve to the users of iPhone 4, thereby preventing the user’s hand touch to the phone antenna.


While the retail price of Apple’s rubber sleeve is $ 29, but according to Sacconaghi estimated that if distributing it free to the user, the actual cost is about $ 1 each. Sacconaghi said: “The program could be applied immediately, not only to directly discourage the concerns of “Consumer Reports”, and would not affect the financial position materially, although Apple will ‘recognize’ the design defects of iPhone 4 (wholesale iPhone cases), but we think that, as more and more consumers are beginning to realize this, so compared to deny or ignore the issue, the most appropriate and timely behavior is the remedial actions.” Sacconaghi said the response of Apple to this matter was more important than the antenna problem itself.


He said: “For Apple investors, the greater and more long-term concern are that Apple shown arrogant constantly, which gradually led to competitors and the hostility of regulators, and may be gradually changing the tendency of consumer.” He added: “Apple’s behavior, including its limited disclosure of information act (the health of Steve Jobs and the spending plan of the cash), the attack on Adobe Flash, the investigation of the missing iPhone (accessories for iPhone) prototype (to search the house of the reporters and the confiscation of their residence computer), the restrictions on application development, the indifference on the iPhone  (wholesale iPhone accessories) antenna problems (such as, requiring users to change a way of holding cell phones, and declared that the problem stems from the failure signal strength display software).


Summary of these concerns together, in time will begin to affect the consumer’s view of Apple, undermining Apple’s huge commercial success. “In addition to allowing users to change a way to hold the mobile phones as well as buy rubber grip sleeve, Apple has not provided other solutions to fix the hardware problem. Instead, the company said, they were developing a software update, hoping to repair the phone’s signal display problems.

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