iPhone 4 recall could cost Apple $1.5 billion - Page 2

I'm waiting on Verizon before I upgrade to the iPhone 4. I held one in my hand for about 5 minutes and was amazed at the resolution of the display and the sheer beauty of the phone. From what I've read the iPhone 4 has better reception than the 3gs model that I own and better reception than most other phones. I own a few shares of apple stock, and I hope Steve Jobs stays the course he has set. I believe it will be a freezing day in Hades before he recalls the iPhone 4.

Right now, nobody is sure how wide spread the reception issue might be but its there for some and not for others. One thing I thought of with this is a potential parallel between the iPhone 4 and the Xbox 360

Both products launched with much anticipation, with both selling out on their initial production runs and continuing to sell very well after. Both were praised for what they offered in terms of features and considered to be the best in their class at the time. Both, almost out of the gate suffered from a nagging issue that affecting some but not the majorityThe Xbox 360 with its red ring of death and the iPhone 4 with its death grip reception issue

Right now, with Apple and the iPhone 4, we have no idea where this will go and what its resolution might be but something telling can be learned from Microsofts experience in dealing with the red ring of death problemIm going to quote a snippet from this article here: http://red-ring-of-death.blogspot.com/

Ive added some things in bold

"In the end I think it was fear of failure, ambition to beat Sony (Apple wanting to beat Android and maintain its lead), and the arrogance that they could figure anything out, that led to the decision to keep shipping. That management team had made some pretty bad decisions in the past (Apple hasnt made many bad decisions but small ones27 iMac displays, Time Capsules..) and had never had to pay a proportional consequence. I'm sure they thought that somehow they would figure it out and everything would end up ok. Plus, they tend to make big decisions like that in terms of dollars. They would rationalize that if the first few million boxes had a high failure rate, a few 10's of millions of dollars would cover it."

Let's hope Apple doesn't go down the same road...

I suspect Apple knew there was an issue with reception. So instead of spending Apple's money to fix it, someone came up with the brilliant idea of charging customers money to fix it - thus the bumper was born. Less than a dollar to manufacture, sell for $29. Then they can tell anyone with problems to buy a bumper to fix it. Genius!

75% of iPhone users simply use one of the many cases available for the iPhone, so they don't have any problems. One the software update is released, this whole thing is over.

You can use the headphones and leave the phone in your pocket.

Well that was a massive mistake because if they almost certainly will have to give a certificate for a iP4 cover. They wont be able to give their bumper away for free. which means the actual cost is now more like $29xNumber of iP4's sold which is already upward of $60m


Software is unlikely to fix the problem for 2 reasons

1 - This is most likely a physics problem
2 - Apple are focusing on changing the display bars


The only way software can fix the problem is if the dropped calls etc are because the firmware switches from 3g to edge to gprs too slowly to maintain the call. In this case software COULD make a significant difference.

Aren't you being kind of harsh?

People have selective memory and with APPLE this issue will pass before you know it. Remember people were preordering the IPHONE4 before anyone really saw it in real life.
When Apple releases its fix lets see the reaction.

Good grief. Where are the idiot police when you really need them?

It seems potentially 100% of owners could be affected, but consider what fraction of owners at any given point in time are experiencing a failure due to the antenna design--and not just any failure but a failure that actually matters?

Roughly speaking, it would be the fraction of users who do not currently have their iP4 enclosed in a case, who are holding it in a manner that bridges the antenna gap, who are presently in a location of low-moderate signal strength, who perhaps don't have an alternate (e.g., EDGE) frequency to fall back on for cellular communications, who are actively trying to make a call or use cellular (not wi-fi) data or for whom someone is trying to call them, and such that the communication is actually important.

On average, how often does an iPhone owner find themselves in such a situation, what fraction of the time do they not know it (and therefore don't know to adjust their grip), and what fraction of that time does it matter?

In spite of how unlikely/infrequently it may seem to matter on average--a figure Apple may be looking at to assess their liability--I prefer not to worry about signal drop at all and to hold my iPhone 4 any way that's most comfortable: I enclosed my iPhone 4 in a bumper, a bumper that I had little desire or intention of ever buying, especially when it interferes with the $29 Apple dock I had already bought for the iPhone 4 and is incompatible with a retractable charger cable I often use. My work desk is a prime location (with 4-5 bars) for dropping signal entirely when the phone is held comfortably but "wrong". That was more than enough reason for me to jump on the bumper I didn't want.

It's early yet, just a couple of days, but I haven't noticed any reception issues with mine, knock on wood. Heck ... even AT&T customer service has been OK.

Launch day- Australia, I'm getting one, I don't give a stuff about what ten million whining American bloggers have to say.

I have been monitoring my day to day iPhone 3G usage and I do not touch that area of the phone.

Only a fool would ignore the seriousness of the iPhone 4 antenna and reception issues. Deleting message threads mentionning the Consumer Report article is childish and definitely not the leadership that iPhone buyers are expecting.

Dear iPhone4 Customers,

Over the last couple of weeks, there has been enormous amount of hysteria about Antenna reception issues related to the iPhone 4. The number of customers actually impacted by this problem is quite minimal, because it only affects people in weak signal areas, and only if the phone is held in certain ways. However, at Apple, we have always believed in delighting customers, every single step of the way - right from the experience while you shop, the experience when you unbox the product, the experience using the product throughout its life. If there is the slightest problem in that experience, real or perceived, it will not be an Apple experience any more.

We wish to offer our customers the following options -

- Extended risk free return period upto 365 days if you have purchased the iPhone4 before 31 Jul 2010. Instead of the usual 30 days, please feel free to try out the product over 365 days. At any point, if you are not satisfied, you can return the product to the nearest Apple Store for a full refund of purchase price. Or just register at the Apple Website and we will arrange to pick up your phone from you, and refund your money. We will also work with AT&T to waive your 2 year contract, if you choose to return your phone. You will however have to bear the AT&T fees for using the phone for the period you choose to keep the phone.

- In addition, if you have purchased an iPhone4 before 31 Jul 2010, you can get free bumpers - just download the "iPhone4" app from the AppStore, select two colors of bumpers, and we will ship those 2 bumpers to you FREE. You can get more colors for $4.99 each. In addition to this, in the same app, you can enter your MobileMe subscriber details, and select Extend Subscription to get 1 year of MobileMe subscription for Free - if you are not currently a MobileMe user, you can sign up for a new MobileMe account free for the first year. If you still decide to return the iPhone 4, you can still continue to use the MobileMe service for free.

- We know iPhone 4 works well for significant majority of customers, and with the bumpers, should work well for pretty much everyone. However, we still realize that the last couple of weeks have been hard for the Apple faithful - especially early adopters. For all our early adopters, here is a special offer - if you have bought an iPhone 4 before 31 Jul 2010, you can exchange your iPhone4 for the then latest release of the iPhone for FREE, 24 months after you purchased the iPhone4. Effectively, when it is time for you to upgrade your current phone, the upgrade is free.

(the above offers are applicable to customers who have purchased an iPhone4 before 31 Jul 2010. All iPhones bought after 31 Jul 2010 will not have the antenna reception issue).

Thanks,
Apple Customer Care

-- This is a hypothetical mail - something I think Apple can and should send out, to mitigate the Antenna issue. Firstly, this way of response will work out a lot cheaper for Apple. Giving a 365 day risk free return costs very little effectively - most people will choose to keep the phone, with the free bumpers. The bumpers themselves should cost Apple just 10-20 cents each in volume. There is already lot of talk of MobileMe becoming free, so giving away MobileMe also will not cost Apple much. In all likelihood, Apple can extend iAd program to MobileMe as well and recover their costs easily. Also, because of the free upgrade to iPhone6, the resale value of the original iPhone4 will likely be a lot higher than the return value of the phone - so in all likelihood, even a dissatisfied customer would rather sell the phone on eBay than return it to Apple!

The only real cost to Apple would be the free upgrade to iPhone 5 on launch - but even this is not really a cost to Apple - because this will be an exchange offer - an Old iPhone4 can be refurbished and sold contract-free, for $299 - so if it costs Apple $100 to refurbish these phones, they can easily sell the old phones back after fixing the antenna issue, and changing some external components - like glass, stainless steel, etc. They could possibly even change the battery to give better battery life. Even if Apple decides not to refurbish these phones, and just recycles the materials, the fact that 10 million phones are not flooding the second hand phone market will give a great boost to iPhone sales in 2012.

The beauty of this solution is that it costs very little in reality, allows significantly higher sales of iPhone4 - I would expect several million people signing up for iPhone4 before 31 July, if they can get a free upgrade to iPhone6 in 2 years. This is one way for Apple to convert a crisis into an opportunity, and regain the trust of customers. Rather than spend $1.5B today, Apple can get more customers today!

I think the iphone 4 deathgrip issue is probably linked to fat left-handed people with sweaty hands.

Japanese people don't see this problem because they have long learned how to text with their right thumb only...and are skinny.

I wish everyone would read the article in Anandtech on this issue. Anandtech is one of the most respected sites for information technology. Brian Klug & Anand Lal Shimpi did pretty thorough testing. The article can be found at: http://www.anandtech.com/show/3794/t...one-4-review/2

Excerpt:
"The Antenna is Improved
From my day of testing, I've determined that the iPhone 4 performs much better than the 3GS in situations where signal is very low, at -113 dBm (1 bar). Previously, dropping this low all but guaranteed that calls would drop, fail to be placed, and data would no longer be transacted at all. I can honestly say that I've never held onto so many calls and data simultaneously on 1 bar at -113 dBm as I have with the iPhone 4, so it's readily apparent that the new baseband hardware is much more sensitive compared to what was in the 3GS. The difference is that reception is massively better on the iPhone 4 in actual use.

With my bumper case on, I made it further into dead zones than ever before, and into marginal areas that would always drop calls without any problems at all. It's amazing really to experience the difference in sensitivity the iPhone 4 brings compared to the 3GS, and issues from holding the phone aside, reception is absolutely definitely improved. I felt like I was going places no iPhone had ever gone before. There's no doubt in my mind this iPhone gets the best cellular reception yet, even though measured signal is lower than the 3GS."

Rather than speculate on the cost, I'd like to see someone come up with a fix.

The question is not whether it will cost a billion to recall the phone. It's whether the issue can be fixed with a simple adaptation of the existing design.

Because redesigning the interior of the phone and remanufacturing supplies will take at least 18 months, and having this drag out that long will do more damage to Apple than any recall.

This is a Toyota-kind of issue for Apple. If their reputation for design leadership and quality takes a public hit, Android and RIM are suddenly back in the game.

Stock manipulation anyone?

How they run their own business is, frankly, their own business.


Flash sucks (esp. on Apple products) and I'll be glad when it's dead. It can't even play a 480p video on a dual-core MacBook without causing the fan to turn on. I'll be damned if I'm putting that crap on my phone, especially if I have no way of blocking Flash ads.


You mean "the police's investigation into multiple felonies" in a case in which Apple was the victim.


Again, their own business.


Finally, a valid point. Their handling of the obviously widespread iPhone 4 issues has been absolutely abysmal.

Most American consumers don't appear to "give a stuff" about what the bloggers have to say either, as the demand here for iPhone4 remains well ahead of supply.

I think the reality is that the bloggers are driven more by Apple's competitors in the mobile phone space than by consumers. Testament to how well Apple is doing with iPhone and how scared the competition is. This blogger blitzkrieg over alleged iPhone antenna issues is for the most part an all out attack on Apple by its competition.

If you go to cnn.com right now the headline is: iPhone 4 can be fixed with duct tape. This is well beyond Apple's competitors and a few discontented bloggers.

Agreed. Then fix it in rev 2. I said this was big. Then came CR, then CNET, then lawsuits for all phones. This is not going away. A free bumper that cost .29 cents to make and fix for the next batch. Problem solved. They cannot charge for them. They simply can't even though 75% use a case. It would be sour apples.

"A recall of the iPhone 4 could cost Apple as much as $1.5 billion"... except it wont because there will be no recall.

A recall is total BS. The iPhone's antenna issue is not safety related, like an exploding battery or failing brakes. Therefore a recall is not necessary. Customers can try and decide on their own if they want to keep the phone or return it within the regular 30 days return period. If Apple gets too many returns they will have to issue free bumpers. If they still get too many returns they will have to replace the iPhone 4 before Christmas. Mr Sacco should try to calculate what that would cost instead of hyperventilating about a recall.

Assumptions.

The Wii Motes would break the tv if you let them fly accidentally. Nintendo gave all customers free rubber covers for every Wii mote they owned. I got 4 of them for no charge. Apple can afford to make a lower cost version of their case for free distribution for those that need it. It does not have to be the fancy bumpers that are more expensive.

A feeing frenzy?

There is as much of a feeding frenzy about this as there was when the White 3GS apparently turned pink and overheated. A couple of reports on the news and now it's all just bullshit reports in tech blogs that the general public (aka 99.9% of the iPhone 4 purchasers) don't read.

When the initial reports of signal loss were on the news in the uk do you know what the response was from purchasers? They bought flipping cases.

My friend is a manager in a large o2 store and he states that as with the 3GS most people buy cases for their iPhones. The iPhone 4 is no different. He has overheard conversations of queuing customers as they discuss the potential signal issues and that it doesn't matter as they are buying a case anyway.

A little side note: has any of these tests made it clear that their is only signal degradation then in 3G mode?

Most iPhone owners I know switch 3G off unless they need the web whilst out and about.

I tried this with my case off and regardless of how hard I grip the phone the bars don't move.

The software update will help Apple a lot. After the update, every single iPhone owner or potential owner walking into a store will be able to verify that, yes, you do lose one bar when you touch the black stripe and, no, this is not such a big deal and won't stop you from make calls, (not to mention all the other great features which are why you're buying a smartphone in the first place and not just a regular phone). The FUD will retreat and sanity will come back into this discussion.

Secondary measures for Apple would be to
1. Offer free bumpers.
2. Release a more sophisticated white paper that shows that phone reception is about more than just decibels and, even with the finger on the black stripe, the iPhone 4 has better reception than older iPhones.

Apple is the only company in the world whose products generate such passion.

Every customer wants one and every competitor wants to copy it with such incredible passion.
Every financial analyst wants a say about the company.


As the world goes into a frenzy over a non-issue software glitch, Apple is as steady as ever as they continue to innovate an execute their plans.

Which ever competitor coerced ConsumerReports to revert their statement will end up with nothing for their money. Perhaps blogs sites will make a few bucks in advertising and the media will have something to talk about for a few days but it will not phase Apple one bit.

Trolls can rant until they turn blue, but there will be no recall or design change on the iPhone 4 because there is no need for that. The signal indicator software on the phone will be updated in the next iOS update. That's all folks.

Time will tell.

Engadget's latest report:

http://www.engadget.com/2010/07/13/y...is-not-broken/

I own an iPhone 4 and yes in some cases its an issue for me.

I think a recall will / should not happen.

A recall is indicated if a replicable, not-recoverable, fatal error with adverse health defects or unfeasible damage occurs.

I know that some people like to construct this but this is not the case because there is a comparable generous return policy and the bumper is a way to circumvent the problem.

I dont know much about US law. In my country you have two to three attempts in a reasonable time frame to fix an issue before You can be forced to a refund.

If an error is hard to understand / investigate in my experience a politic of targeted investigation and replacement is the way to go.

For both, Apple and its customers, the 1.5 billion are better invested in improved warranty processes, quality assurance, manufacturing processes, research and customer support.

Perhaps I will buy a bumper although it hurts the esthetics, which I dislike.

I will not ask for a refund because theres currently no other device that fits my needs as well as this phone. It works brilliant at 99% of my use cases. I'm just not 100% happy.

And I would say, if not for Steve Jobs your shares wouldn't be worth a penny. Apple would have simply moved into nonexistence in mid 90ties. Why don't you people think a second, before posting such nonsense?

->>>>>

All "real" shareholders know that Apple has not paid dividends since 1995. Try trolling using facts.

Seems like Apple is the new BP. CNBS can't get a word in edgewise without bringing up the iPhone. Re the great CS test, seems like they were using a weak signal.

The 25% it affects don't like to use cases, so a free Bumper - which some argue is an ugly case - is no solution at all.

Apple deleted them because it was a support forum and no one was there for support - it was just another whine-fest. Why should Apple let its legitimate support get crowded out by incessant, useless whining (much of it stirred up by the competition, no doubt).


No, just a feeding frenzy fed by HTC, Google, RIM, and the inveterate Apple-haters.


These stories do take on a life of their own - and then they disappear when reality eventually hits.


Did YOU read the full report - or just the bit you wanted to read? Both CR and Anand's tests show that, EVEN WITH THE SIGNAL DEGRADATION, the phone reception is better than the competition. In fact, it's funny to see people citing CR as a valid source for their complaints - yet CR rated the iPhone 4 as the best phone on the market.


Because 'best' doesn't mean that it can't be even better. Not to mention, of course, that some people use cases to protect their significant investment.


I wouldn't say it wasn't well thought out, I think your second sentence is closer to the truth. Their tests showed that the phone worked very well - later confirmed by Anand and CR, so their tests weren't wrong. Either they didn't see the problem - because you really do have to hold the phone unnaturally to experience it - or they figured that simply shifting your finger a few mm was such a minor issue that no one in their right mind would care.

If they underestimated anything, it's that they are such a divisive company. While a lot of their customers love their products, there is also a big cloud of people out there who absolutely hate Apple and everything they do - and who will stop at nothing to stir up trouble. Last spring, it was all the Flash 'developers' - and that whining has finally died down (thank goodnesss). Now, it's the Android shills. That will die down, too.

They're not having mine back - it works perfectly... No issues here (or for anyone else I know who owns one, except one that literally died after a week, replaced no questions asked, with apology and free bumper at the apple store.

No you're not. iPhone 4 hasn't even been released in your country.

Sorry, 3G as opposed to what? Would this be able to be turned off in other countries like Japan?