Apple is refusing to say whether their new iPhone 4 which set to be launched this month in Australia will have the same problem as their US model where Apple may be forced to issue plastic cases to eliminate antenna reception problems.
Last night, there were calls for Apple to recall the iPhone 4 due to antenna problems. The recall, if implemented, could cost Apple up to $2 Billion dollars.
Earlier this week the influential US Consumer Report which is the equivalent of Choice in Australia said that it could not recommend a consumer purchase of the device due to problems with the phone’s antenna system.
According to forums and user reports in the USA where the phone has been on sale for three weeks, the problem occurs when a user presses their hand against an exterior metal strip surrounding the phone, the strip houses the antenna.
Carriers Telstra, Optus and Vodafone say that they are unable to comment on the issue with one insider at Telstra claiming that Apple is still trying to resolve the issue.
One alternative for Apple is to delay the launch in Australia.
According to calculations made by Bernstein Research analyst Toni Sacconaghi, in a research note issued last night she said that “a full product recall of the iPhone 4 (is) highly unlikely” as it would cost Apple $1.5 billion, or 3.5 per cent of its total cash on hand.
One option is that Apple Australia issue free rubber cases with each phone sold in Australia. These say accessory manufacturers would cost Apple around $2 a unit.
Sacconaghi said of this solution: “It could be done immediately; it would directly address the Consumer Report’s concern, and would be financially immaterial”.
She added according to CNet: “While it would force Apple to ‘acknowledge’ a design issue with the iPhone, we believe that consumers are increasingly aware of the antenna issue, and remedying it rather than dismissing or ignoring it appears most appropriate.”
Apple shares slid US$5.49, or 2.1 per cent, on the Nasdaq exchange after the US Consumer Report was issued.