End of Apple's iPhone 4 Case Program seen as benefit to shareholders

Posted:
in iPhone edited January 2014
Apple's conclusion of the iPhone 4 Case Program, but extended offer of free protective Bumpers for customers who contact AppleCare, is a positive for customers that will also likely benefit AAPL shareholders, one analyst believes.



In a note to investors Monday, Shaw Wu with Kaufman Bros. said Apple's announcement last week that it would end the iPhone 4 Case Program is a positive for both customers, who can still receive a free bumper, as well as shareholders.



"As a good gesture, AAPL will continue to offer a free bumper case through AppleCare for those who still want one," Wu wrote. "We believe these moves make a lot of sense for both customers and shareholders. The reason is that AAPL will continue to offer free cases to those who want one even though data points continue to indicate that only a small faction of users experience antenna reception issues."



In addition, he said the $175 million set aside for the iPhone 4 Case Program could actually be accretive, and add between 25 cents and 45 cents to Apple's 2011 earnings per share. He noted the $175 million set aside isn't a lot for a company with $45.8 billion in cash.



"The reason for potential accretion is because in its accounting, AAPL already takes a reserve for warranties on every product it sells including iPhones and the elimination of additional reserves is additive," he wrote.



Last Friday, Apple revealed that the iPhone 4 case program will conclude on Sept. 30. That deadline was originally given when the program was announced in July, but Apple said at the time it would reevaluate the program.



In that evaluation, Apple said it found that the issue of antenna attenuation with the iPhone 4 was "smaller" than they had originally thought. "A small percentage of iPhone 4 users need a case," it said.



The company will still provide free bumpers to customers who contact AppleCare, but they will no longer be able to request third party cases as they could through the iPhone 4 Case Program software on the App Store. The program offered cases from manufacturers including Griffin, Belkin and Speck.



Wu originally predicted that Apple would give away free bumpers in June, when he said such a move would have little financial impact on the company.



Apple initiated the giveaway after complaints about loss of signal when improperly holding the iPhone 4 gained a considerable amount of media attention. Apple responded by stating that all smartphones experience some form of attenuation when held in a certain way.
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Comments

  • Reply 1 of 71
    Funny how no one mentioned the reception problem after the free bumpers were announced. Non problem from beginning.
  • Reply 2 of 71
    I can't believe the attitude of this company. After burying their head in the sand for weeks, they finally address the cries of the Apple community with a press conference. Then Lord Jobs comes out on stage with the most arrogant and unfeeling apology in the history of apologies and grudgingly agree to give out free cases. Now they want to pull the plug on the case program and leave their customers twisting in the wind.



    I think this might actually top the big F-you Steve O gave original iPhone customers when he dropped the price of the phone by two hundred bucks. Then he grudgingly gave everyone a hundred buck gift card usable only at the Apple store.



    Said it before and will say it again. This guy really has lost his mind. Must be his medication.
  • Reply 3 of 71
    Quote:
    Originally Posted by IronHeadSlim View Post


    Funny how no one mentioned the reception problem after the free bumpers were announced. Non problem from beginning.



    Just because it didn't happen to you or me doesn't mean it didn't happen to anyone else on the planet. It's a big world. Drop the arrogance.
  • Reply 4 of 71
    saareksaarek Posts: 1,139member
    Quote:
    Originally Posted by Blackintosh View Post


    Just because it didn't happen to you or me doesn't mean it didn't happen to anyone else on the planet. It's a big world. Drop the arrogance.



    I think it's fair to say that Apple cocked up, but having said that the problem was blown completely out of proportion.



    As long as they keep supplying free bumpers anyone who has the problem can no longer really complain, it's not ideal and I'm sure that the iPhone 5 wont have this type of problem.
  • Reply 5 of 71
    There was never an actual need for one in the first place.



    But I'm not complaining, I got a gorgeous InCase Snap (clear) case for free.



    http://www.goincase.com/products/detail/cl59630/1
  • Reply 6 of 71
    Quote:
    Originally Posted by Blackintosh View Post


    I can't believe the attitude of this company. After burying their head in the sand for weeks, they finally address the cries of the Apple community with a press conference. Then Lord Jobs comes out on stage with the most arrogant and unfeeling apology in the history of apologies and grudgingly agree to give out free cases. Now they want to pull the plug on the case program and leave their customers twisting in the wind.



    I think this might actually top the big F-you Steve O gave original iPhone customers when he dropped the price of the phone by two hundred bucks. Then he grudgingly gave everyone a hundred buck gift card usable only at the Apple store.



    Said it before and will say it again. This guy really has lost his mind. Must be his medication.



    I guess whatever makes you feel better..



    You've been saying the same thing over and over and we've been hearing it over and over. You've made your feelings about Apple and Jobs perfectly clear.
  • Reply 7 of 71
    Quote:
    Originally Posted by Blackintosh View Post


    I can't believe the attitude of this company. After burying their head in the sand for weeks, they finally address the cries of the Apple community with a press conference. Then Lord Jobs comes out on stage with the most arrogant and unfeeling apology in the history of apologies and grudgingly agree to give out free cases. Now they want to pull the plug on the case program and leave their customers twisting in the wind.



    I think this might actually top the big F-you Steve O gave original iPhone customers when he dropped the price of the phone by two hundred bucks. Then he grudgingly gave everyone a hundred buck gift card usable only at the Apple store.



    Said it before and will say it again. This guy really has lost his mind. Must be his medication.



    You're still getting an iPhone, "arrogant" Apple or not. Even an iPhone with reception problems (hypothetically) is still better than a perfectly-functioning knock-of pushed out and pinched off by the competition.



    And there was no real problem in the first place. The REAL problem were the imbeciles, astroturfers and the FUD-purveyors getting a little too-much anti-Apple stage time. Apple's mindshare is usually so rock-solid that even the best efforts of the perpetually misguided and outclassed roll off Apple like rain, but this time they got a few shots in. Of course, given what the iPhone and iDevices bring to the table, Apple's next quarterly report will continue to tell the same positive story as usual.
  • Reply 8 of 71
    Quote:
    Originally Posted by Quadra 610 View Post


    There was never an actual need for one in the first place.



    But I'm not complaining, I got a gorgeous InCase Snap (clear) case for free.



    http://www.goincase.com/products/detail/cl59630/1



    Never a need? All the complaints were false? Every single one?



    Well, as a shareholder this outrages me. And as far as you're concerned you had better fork over thirty bucks for that case you got.



    Fanboys. Arrogance with a touch of madness.
  • Reply 9 of 71
    Quote:
    Originally Posted by Wurm5150 View Post


    I guess whatever makes you feel better..



    You've been saying the same thing over and over and we've been hearing it over and over. You've made your feelings about Apple and Jobs perfectly clear.



    Okay fine. I'm a broken record. But if Apple does something new that is stupid, I think it "opens the door" for me to say it all over again. Can't wait for tomorrow.



    You know, it would be nice for both of us, nay all of us, if Apple would do something to please it's customers, instead of making them (the normal ones) shake their heads and think, "what the hell are you doing??"
  • Reply 10 of 71
    Quote:
    Originally Posted by Quadra 610 View Post


    And there was no real problem in the first place. The REAL problem were the imbeciles, astroturfers and the FUD-purveyors getting a little too-much anti-Apple stage time. Apple's mindshare is usually so rock-solid that even the best efforts of the perpetually misguided and outclassed roll off Apple like rain, but this time they got a few shots in. Of course, given what the iPhone and iDevices bring to the table, Apple's next quarterly report will continue to tell the same positive story as usual.



    Apple's mindshare? Let me tell you about Apple's mindshare. I hear about it all the time because I use Apple products at work. In fact I'm referred to as Mr. Apple and used to be quite the cheerleader for them.



    Most of the world considers Apple to be "that company that makes iPods." Most don't even know that Apple makes computers because Windows dominates the earth. Moreover, Apple fans are considered just that. Fans. The word fan is short for fanatic. They think of us like Trekkers, or Twilight-ers or whatever is hip right now. Geeky Kool Aid drinking fanboys.



    That is Apple's mindshare if you look just about anywhere but this forum. There is an entire world out there you know. Try living in it.
  • Reply 11 of 71
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Blackintosh View Post


    Okay fine. I'm a broken record. But if Apple does something new that is stupid, I think it "opens the door" for me to say it all over again. Can't wait for tomorrow.



    You know, it would be nice for both of us, nay all of us, if Apple would do something to please it's customers, instead of making them (the normal ones) shake their heads and think, "what the hell are you doing??"



    If this *new* thing is using the frame as the antenna, then it being *stupid* would mean the next iPhone will go back to using a separate antenna system for the device with the frame being created by plastic or some other non-conductive material.



    We?ll see what happens by September 30th since that is when this program ends, but since Apple stated that the issue was much smaller than they originally thought ? which implies that it was blown out of proportion by the media ? I have to think that we will not see a new iPhone design come the first of October.
  • Reply 12 of 71
    Quote:
    Originally Posted by Blackintosh View Post


    Just because it didn't happen to you or me doesn't mean it didn't happen to anyone else on the planet. It's a big world. Drop the arrogance.



    Chill. What's with all the hostility? This really was a big over-blown media-hyped turd. Everyone I know who got one of these cases got one of the cases because Apple offered them, not because they needed them. Most turned right around and took the thing off their iPhone anyway. I got a bumper myself and used it only for a few days.



    Apple really doesn't need to continue this program.
  • Reply 13 of 71
    Quote:
    Originally Posted by solipsism View Post


    If this *new* thing is using the frame as the antenna, then it being *stupid* would mean the next iPhone will go back to using a separate antenna system for the device with the frame being created by plastic or some other non-conductive material.



    We?ll see what happens by September 30th since that is when this program ends, but since Apple stated that the issue was much smaller than they originally thought ? which implies that it was blown out of proportion by the media ? I have to think that we will not see a new iPhone design come the first of October.



    I was not referring to the antenna as the new thing, I was referring to the cancellation of the case program which just happened this weekend.



    As far as a new design, it should happen but I agree it wont. The case program should have been followed up by a product recall. That was the right thing to do. And if they really want to improve reception, may I suggest opening the phone up to other carriers that have good reception? I wont mention any names.
  • Reply 14 of 71
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Blackintosh View Post


    I was not referring to the antenna as the new thing, I was referring to the cancellation of the case program which just happened this weekend.



    As far as a new design, it should happen but I agree it wont. The case program should have been followed up by a product recall. That was the right thing to do. And if they really want to improve reception, may I suggest opening the phone up to other carriers that have good reception? I wont mention any names.



    1) You don?t understand what product recalls are for to make such a suggestion.



    2) You don?t understand how cellular technology works if you think that making the phone ?open? will magically make it work on other US carriers. T-Mobile USA?s EDGE is the only MNO that you?ll get service from.
  • Reply 15 of 71
    Quote:
    Originally Posted by Xian Zhu Xuande View Post


    Chill. What's with all the hostility? This really was a big over-blown media-hyped turd. Everyone I know who got one of these cases got one of the cases because Apple offered them, not because they needed them. Most turned right around and took the thing off their iPhone anyway. I got a bumper myself and used it only for a few days.



    Apple really doesn't need to continue this program.



    The hostility is a knee jerk reaction to a common habit on this forum. Whenever there is a problem with an Apple product, the fanboys rush out to be first in line to say "I never have that problem. Ergo no one in the whole world has that problem." You said as much in your post just now.



    I find this frustrating and rather worthless to those who need real solutions to problems. It's like admitting you have a problem with an Apple product means your weak or something and everyone here jumps on that. "I never have that problem so there must be something wrong with YOU."



    I never drop a call, never have a yellow monitor, never see my own reflection in a glossy screen, never wanted to visit a flash website, etc etc.



    The antenna issue was a real problem for some. Listen to the MacWorld podcast. Listen to a Mac Roundtable podcast. These people are fanboys just like you and have no reason to lie.



    Just admit the problem was real to SOME people and I will chill.
  • Reply 16 of 71
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Blackintosh View Post


    Just admit the problem was real to SOME people and I will chill.



    So a problem for SOME means that a product recall of all iPhone 4s should have taken place. Awesome logic!
  • Reply 17 of 71
    Quote:
    Originally Posted by solipsism View Post


    1) You don?t understand what product recalls are for to make such a suggestion.



    2) You don?t understand how cellular technology works if you think that making the phone ?open? will magically make it work on other US carriers. T-Mobile USA?s EDGE is the only MNO that you?ll get service from.



    1: The product recall was MacWorld's idea. So I guess they don't understand either. Only you do.



    2: I understand enough about cellular technology to understand no carrier is everywhere and the best shot people have to get a signal is to use the carrier that is strongest where they live.



    Can you see even the tiniest bit of logic in my words? Any little bit? Am I right on any level? ANY??
  • Reply 18 of 71
    Quote:
    Originally Posted by solipsism View Post


    So a problem for SOME means that a product recall of all iPhone 4s should have taken place. Awesome logic!



    Yes! And that's the kind of thinking I'm trying to get across here! Thank you!!!!
  • Reply 19 of 71
    Quote:
    Originally Posted by solipsism View Post


    So a problem for SOME means that a product recall of all iPhone 4s should have taken place. Awesome logic!



    Seriously, I watched the videos of other phones with death grips and to be fair, those examples seemed to be someone squeezing the crap out of the phone. The iPhone looses it's signal when holding the phone in a natural way in the left hand. Placing the antenna on the outside clearly makes this problem more severe on the iPhone 4. Never had this happen on my 3G.



    It's the natural way part that warrants a recall IMHO.



    And Apple did pull those videos, right? Why??
  • Reply 20 of 71
    Quote:
    Originally Posted by Blackintosh View Post


    Just because it didn't happen to you or me doesn't mean it didn't happen to anyone else on the planet. It's a big world. Drop the arrogance.



    I think he mentioned that " it's funny ". I see no arrogance. May be you should stop 'Police-ing". Just saying!
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