iPhone 4G?

[Bryancd]

Bryan - can you explain to me what stock price has to do with recalling a defective product?

Sure. The price of any stock at any given moment is a reflection of a companies current profitability, future potential earning, and the growth of those revenues. So a stocks price is a companies forward earnings divided by the number of shares outstanding. A stock can trade at a premium or discount to this model depending on how people feel about future growth prospects. That's all the stock market is, a futre discounting mechanism for equity values.

So in regards to the iPhone, if they do a general recall of all the phones sold, it will have a cost to the comapny, a charge back, that will adversely effect this quarters profitability. Therefore the stockl price needs to discount that revenue shortfall. RBC Capital did a great analysis this morning on the various impacts of three potential scenarios: Provide free cases, repair the effected phones, recall ALL the phones. H ealso shows the potential impact on share price.

http://www.appleinsider.com/articles/10/07/14/every_week_apple_doesnt_act_on_iphone_4_antenna_could_cost_200m.html

[Rico]

In a nutshell, a way for them to make their lost money back.  However, they will boost their image immensely if they come out an issue some type of statement either extending that 30 day return window and/or offering to replace the phones in the future with the next, better version (such as dual, internal antenna mode - like they should have done).  It's been interesting to see how this has all gone down so far.  And I think it's far from over.

P.S.  Oh - ALL iPhone 4's have this issue.  The only variable is the reception in your given area and how that impacts you.  But again, you better be darn sure you don't visit an area with weaker coverage if you think you are ok - for now.

[Feathers]

P.S.  Oh - ALL iPhone 4's have this issue.  The only variable is the reception in your given area and how that impacts you.  But again, you better be darn sure you don't visit an area with weaker coverage if you think you are ok - for now.

Agreed. There's no engineering reason why only a subset of the phones are affected. The differences only lie in the local signal reception and the characteristics of the individual holding the phone...but I think I already said that. :)

[QuadShot]

Actually, if the iPhone 4 was a car, a recall would have happened already. Remember, I'm a fan of Apple, loved my iPhone 3G, jumped on the iPhone 4 the first day.  I love the device, it's way cool, BUT, the phone function sucks. There are some quirks in the iPhone 4 (maybe hardware, maybe os, maybe both), that make it frustrating. I've read about the possibility of a recall and I think they SHOULD recall it. Man-up and take care of your loyal customers, before they aren't your loyal customers anymore. But...I fear Apple WON'T recall because if they did, that would be openly admitting that they put a defective product on the market, which will lend credibility to all the class action law suits out there. This one mistake could cost Apple a lot.  Too bad too.

[QuadShot]

P.S.  Oh - ALL iPhone 4's have this issue.  The only variable is the reception in your given area and how that impacts you.  But again, you better be darn sure you don't visit an area with weaker coverage if you think you are ok - for now.

Well, from a mass manufacturing standpoint, it is possible that a large batch was defective for whatever reason: bad parts, faulty machinery, etc.  But I agree, I think it's all iPhone 4's, and if you happen to have one that's not having recepting issues, odds are you are close enough to a source tower to "mask" the issue...

Agreed. There's no engineering reason why only a subset of the phones are affected. The differences only lie in the local signal reception and the characteristics of the individual holding the phone...but I think I already said that. :)

[Bryancd]

Apple will be holding a press conference tomorrow morning and there is some speculation that OS4.01 might be released today in advance of that.

[billybob476]

I look forward to hearing what they are going to do/say.

[RickPeete]

I hope they fix the OTA iTunes podcast downloading problem as well.  This "error while downloading podcast" error is ticking me off!  :(

[Rico]

Apple will be holding a press conference tomorrow morning and there is some speculation that OS4.01 might be released today in advance of that.

Press conference??  Yikes!  Predictions??

- Free cases
- Extended return period
- Recall??
- Steve Jobs goes to each customer's home and shows them the proper "iPhone Grip" method.

[billybob476]

Well, a recall would only be useful if they have either a fix or a revised model. Free cases seems like the most practical but it seems like a 'patch' and not a solution.

[Rico]

Well, a recall would only be useful if they have either a fix or a revised model. Free cases seems like the most practical but it seems like a 'patch' and not a solution.

The recall doesn't have to happen now.  They could say they are working on it and everyone will get iPhone 4.1 when it's ready.  I mean we all know they HAVE to change the antenna in the next version.  And given the current reports and press, I see that coming faster than any new version ever before.

[Bryancd]

Yes, as I said a few pages ago, there will NOT be a recall and this is not a situation which can/would result in a class action lawsuit. There are no grounds for damages when the product can be returned. You can't claim you have been harmed because you drop a call and they would never be able to prove the company knowing sold the product under false pretense.

I think what will become clear is that Apple's response to this, which certainly appears poorly managed, has been difficult. The manner in which these issue's manifested themselves were at first random and sporadic. The comany had to research and try and figure out exactly what was happening and how to fix it. Once they determine that, they need to decide on how to address customer concerns and issues in the most effective manner. The amount of histrionics on the internet not withstanding. Chances are they will provide the bumpers/cases to current owners, provide the planned software update, and make whatever design changes they need to future models. The iPhone 4G continues to sell despite this issue which again speak volumes to the strength of the product and how the consuming public feels about it.

[QuadShot]

In my humble opinion, Apple needs to "man-up" (or, for those Anomaly folks out there - - woman-up), and take care of business.  If it means refunding a portion of the purchase price then so be it. I am a bit ashamed of Apple right now. I'm looking forward to this press conference tomorrow.  I think the future of their reputation hinges on what they say. Al

[QuadShot]

Bryan, I don't really agree with that. Honestly there is enough "ammo" to have a really good shot at winning.  Not entirely sure why you think there isn't enough grounds to file a class action suit since there really is.  There are really only 4 criteria to launch a class action and two of them are Numerosity (having enough people participating) and Commonality (common issues of fact).  This situation certainly has both of those. Not only are consumers making statements about the iPhone 4 inadequacy but Apple themselves have made statements of fact. There are certainly plenty of people signing on for this class action lawsuit and given the situation, I believe with the right representation they could win at least something.
This issue began as "sporadic" simply because it took a little time for these issues to begin revealing themselves.  If you remember, it wasn't long at all before the message boards all over the place began lighting up about all the probelms.  In fact, the very night we purchased ours (which was the first day they were sold), there were already hundreds of posts out there about the problems. And for the record, I'm pretty sure that Apple knew about a majority of the issues prior to releasing.  The same thing occurs in the automotive industry. If you get reports of 100 people having accelerator issues in their cars, it's nothing to take action on.  When that number reaches 1,000+, then we make a statement.  Once people are injured or killed, we take action.  This is not my opinion, this is fact - textbook management. I'm certain Apple (even though I LOVE my Apple products) carries on business thusly. They had to know about these issues.  They're too good at what they do NOT to have known.  BUT...management most likely felt it wasn't worth worrying about unless it became a huge problem...which is now is.  So, first they made some statements, and now I believe they'll have some sort of "fix" and hopefully it won't be those ugly useless bumpers.  I bought those for mine and my wife's iPhone 4, and they didn't work at all.  Didn't boost, improve or degrade the signal in the least, so in my opinion, a $30 waste. We returned them.
And I'm not sure that the fact the iPhone 4 (I don't think it's considered the 4G) is still selling is a testement to the strength of the product but the loyalty of Apples customer base. Which is why I really hope Apple does something positive about this Charlie Foxtrox because I'm guarantee this, if they don't, us loyal customers will jump ship.  Why should WE continue our loyalty if THEY won't?---Al

[Bryancd]

I'm simply stating what I feel will be the most likely outcome of this situation Al, you don't have to agree. :) It's what I do every day.

Apple brand loyalty won't take a hit on this. It may for you, but I look at the macro picture and research is showing that demand for Apple products, especially heading into the fall back to school and holiday season is very strong. This is where sober research trumps internet articles and forum posts.