iPhone 4 recall would cost $1.5 billion

Discussion in 'Apple, Inc and Tech Industry' started by WiiDSmoker, Jul 13, 2010.

  1. WiiDSmoker macrumors 65816

    WiiDSmoker

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    #1
    http://news.cnet.com/8301-31021_3-20010443-260.html

    Apple needs to do something now before this figure gets bigger.
     
  2. old-school macrumors 6502

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    #2
    The longer they leave it the more costly a recall would be. I think it's likely they are working on software to try and help the issue; and that is why they are stalling. From a business perspective recalls are very difficult to make the call on whether they are going to be in a company's best interest or not. Perception/reputation cost vs. recall cost.
     
  3. Figbash Acrobat macrumors 6502a

    Figbash Acrobat

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    #3
    It's good that CNET is weighing in on this. They're a respected source and sometimes nudge companies into action. An example is with a certain series of Samsung LCD TVs with faulty/blown capacitors that cost like 20 cents a piece. Of course this issue would arise with most of these tvs until out of warranty.

    It became a widespread and widely reported issue among the CNET board members. A Samsung representative eventually redirected that feedback to Samsung, who then acknowledged the problem (even with out of warranty sets) and agreed to offer a one time, free of charge repair of problematic televisions. Mine was one of these and I had it repaired for free, though i could've just as easily replaced the caps myself but didnt want to wait for them to come in the mail. Two days after calling Samsung, a repairman basically replaced three capacitors with slightly higher voltage ones. Problem solved.

    Now, granted, this is a far cry from the expenses weighed in deciding on a recall for millions of brand new phones. But my point is with consumer reports and cnet, among many other major journalist/review sources, now backing the cause it puts a lot more pressure on Apple (than forum communities) to make a decision sooner than later before jeopardizing their customer base and overall image.

    They likely are stalling for the sake of the software update, in hopes that they can avoid a recall, but also are more than likely already altering what production process they can to alleviate signal loss. I still think a recall is a long shot when they can just as easily replace problem iPhones with refurbished units (for anyone who even notices signal issues) and meanwhile focus on their current assembly line and any yet to be manufactured units.

    I know most of this has been reiterated many times over, but I just wanted to share my CNET-related anecdote. I still rely on CNET more than any other resource before buying any electronics as they are a very trustworthy site, and have some tout when it comes to user feedback and how it gets bounced back to the manufacturers.
     
  4. samcraig macrumors P6

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    #4
    It could cost a lot more if they don't do it - or if they delay enough. I'm not just talking out of pocket expenses for the recall. I'm talking about brand loyalty, new customers, brand image - all in the long term.
     
  5. DWHH1 macrumors newbie

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    May 13, 2010
    #5
    O2 seeing iPhone 4 being returned?

    I got a call this morning from a friend who knows I got an iPhone 4 about a week ago, from O2 in the UK, to tell me he had heard that O2 had seen several hundred people returning their new iPhone 4's. Is this true? Has anyone else heard about this? Are they keeping it quiet?

    To make matters worse I hadn't realised there was a problem with my iPhone 4 so I told him it was just a problem with some software used to display the signal bars and it would get fixed soon. He completely disagreed and asked to be put on speaker phone while I held the phone and watched the bars. Initially I said it was fine but over about 20 seconds or so the signal dropped from 4 bars down to 'Searching' to 'No Service' and I had to call him back.

    Worse still 20 minutes later my bank called and within 30 seconds the called had dropped and they had to call me back.

    This is appalling. I feel really let down by Apple. A phone that doesn't work as a phone isn't a phone so I am going to have join the other hundreds of people who are returning their iPhone 4 to O2 and I guess my friend was correct.

    I just can't believe it.
     
  6. itsmemuffins macrumors 68030

    itsmemuffins

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    #6

    So how could the recommend the Nexus One with all its 3G issues.

    And Google stated it will not be fixing it?
     
  7. ddoolin macrumors regular

    ddoolin

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  8. Figbash Acrobat macrumors 6502a

    Figbash Acrobat

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    #8
    Don't know about that one. Google makes phones, you say? ;)

    Anyway, no one said it was fool proof. Mind you, my tele is over 3 years old and I only know of Samsung agreeing to free-of-charge repairs taking place in the last 4-5 months.

    Still, my point is CNET is still one the most reputable tech review sites....and whatdoyaknow: Apple just announced they are holding a press conference Friday regarding iPhone 4. An omen, perhaps? :D
     
  9. Billy Mays macrumors member

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    #9
    Everyone should look at how much cash Apple has on hand. $1.5 billion is pocket change.
     
  10. Figbash Acrobat macrumors 6502a

    Figbash Acrobat

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    #10
    Def agreed. But I'm sure they're considering stock value, which could be more than pocket change to individual stockholders, esp. if you take into account how much more stock could drop after 'admitting' fault. Just a thought. Hopefully Friday will be revealing. It's not everyday Apple announces unplanned press conferences just two days out.
     
  11. angrywaiter macrumors member

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    Sep 28, 2007
    #11
    This is why they'd have product recall insurance.

    They'd seek to pass the cost to Insurers. The subrogation rights would then pass to Insurers who'd seek to litigate against any of the parties involved in the construction should it be shown any defect was due to negligent/faulty product build.

    The question to ask is whether the design was outsourced to an external company. Because if the antenna issue is what forces a recall then apple is going to be knocking on a few doors seeking to lay blame and recoup some of its losses.

    just my two-pennies worth... back to work i go...byyyyeee!
     
  12. Billy Mays macrumors member

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    #12
    Yeah, their stock could definitely take a hit but if they admit fault and issue a recall, people will see that they are headed in the right direction. Let's be honest here, even if the stock price does drop, that sucker is going right back up in a week or two. That'd be the time to buy. I remember when it was down to, I think, $82 when Steve took his time off. I'd be rich if I bought some then. >.<
     
  13. mcnicks macrumors regular

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    #13
    I thought it was the police who investigated the theft, obtained a warrant, searched the home and siezed the computers?
     
  14. Amnesia87 macrumors 6502

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    Jun 19, 2010
    #14
    That figure seems WAY too high, that's based on the retail prices of the phones methinks. I believe ifixit said the cost of the actual materials used in the phone were worth like $200 add in like 50 - 100 for manufacturing packaging and shipping.

    300 per phone x 2mil

    .6 billion

    Not to mention it's not life threatening or anything, so it would be a voluntary recall. Which means they wouldn't get hit with the full amount at once.
     
  15. Billy Mays macrumors member

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    #15
    Apple could also take the iPhones that were sent back, fix them, and sell them as refurbs. Apple could very easily make money with a recall.
     
  16. Full of Win macrumors 68030

    Full of Win

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    #16
    This is not about money, its about saving the reputation of Apple. They are on the verge of becoming a joke in public perception. I don't even tell people I have an iPhone 4 because they always ask about this issue. Like it or not, this is entering into the zeitgeist.
     
  17. goobot macrumors 603

    goobot

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    #17
    or they could just give everyone a credit to buy another thing in their store and walk away. truly i can see that.
     
  18. itsmemuffins macrumors 68030

    itsmemuffins

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    #18
    Not really understanding what you are trying to say there?:confused:
     
  19. tom. macrumors 6502

    tom.

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    #19
    I have to say I find a product recall and free bumpers both equally hard to believe. If they are going to admit there is a real problem with this antenna, a bumper seems like a very poor escape.
     
  20. Billy Mays macrumors member

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    #20
    They aren't going to give out free bumpers. That would mean they admit there is a problem and offering an accessory isn't a fix. It would make people rage even further and they could still face litigation.
     
  21. samcraig macrumors P6

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    #21
    Your lack of understanding economics is troubling. There is NO way Apple can MAKE money with a recall. Let me know if you need me to draw you a map.
     
  22. DeathChill macrumors 68000

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    Jul 15, 2005
    #22
    I agree. I certainly don't want a bumper and providing them now would mean they'd always have to provide them for every iPhone 4 purchase. It'd be a band-aid, not a real solution.
     
  23. Leaira macrumors newbie

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    #23
    HA! :D As far as I'm concerned, they ARE a joke! And have been for over half a decade!
     
  24. itsmemuffins macrumors 68030

    itsmemuffins

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    #24
    I know Google search isn't what it used to be, and don't get me started on the Nexus One and the 3G issues Google refuse to fix.:rolleyes:
     
  25. FX120 macrumors 65816

    FX120

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    #25
    It's not that simple. Figure the cost of the original phone and the replacement phone cost, plus lost sales and income due to a recall of that magnitude and it sounds about right. Not to mention the long term damage.
     

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