Recall rumours rock stock
Opinion is divided as to whether Apple will recall its iPhone 4, which has been plagued by reception controversy since launch, but some analysts claim such a move could cost Apple $1.5bn.
One analyst for Bernstein research has estimated a product recall of the best-selling phone could cost Apple around $250 per phone, according to The Wall Street Journal.
Toni Sacconaghi believes with around 6m phones sold, the bill for a total product recall could reach $1.5bn, although he reportedly dubbed such a scenario "highly unlikely".
According to The Daily Telegraph, Apple has already lost money as a result of bad press surrounding its phone's antenna fault. Its share price fell by 4.2 percent, as investors panicked about the possibility of a costly product recall and at its lowest point Apple's market value plunged by almost $10bn.
Sacconaghi reportedly believes the company would take less of a financial hit by offering an in-store hardware repair service, which would probably cost around $75 per phone, or about $450 in total, while a free case give-away would prove the cheapest option, costing about $1 a customer and the company a more palatable $6m overall.
Whatever option, if any, Apple takes, the cost to its reputation may dwarf the financial implications. Many commentators fear the way the company has dealt with the antenna debacle may have rocked customer perception and trust.
Sacconaghi reportedly said the bigger picture is more worrying because of "the emerging pattern of hubris that the company has displayed" including its sometimes perceivably aggressive approach to its competitors, restricted stance on app development and refusal to discuss its business plans.
"The worry is that collectively these issues may over time begin to impact consumer's perceptions of Apple, undermining its enormous prevailing commercial success," he added.
Several PR industry commentators have said Apple must recall its iPhone 4 to rebuild its reputation and provide a more meaningful and high-profile solution than a software fix.
PR guru, Dr Levy Barton, told T3: [Apple's] response has been lacklustre. It's been borderline irresponsible. They are in great danger of betraying customers' trust and hurting the brand, which is infinitely more valuable than any one product."
The influential American firm Consumer Reports, which once again focused attention on the iPhone 4's antenna issues through a negative review, has called for action in a blog post, which reads: "We think it's the company's responsibility to provide the fix-at no extra cost to consumers."
It highlighted Apple's forthcoming software update and offer of a full refund to dissatisfied customers, but added: "for those who prefer to keep their iPhone, we encourage Apple to step forward soon with a remedy that fixes the confirmed antenna issue, and not one that requires additional consumer expense."
