Ssn Francisco, July 16: Apple Inc is likely to announce a fix for the iPhone 4’s reception problems on Friday rather than recall the device, hoping to stem a growing chorus of complaints and avert any lasting damage to its carefully earned reputation for quality products.
Apple, which surprised consumers and investors when it said it will convene an iPhone 4 press conference, has kept mum on what it will do. But analysts are betting that — despite lawsuits, a poor review from Consumer Report and growing user complaints — it will not initiate a costly and embarrassing recall.
Investors will be looking for a fuller explanation of what analysts call a minor issue, but which has managed to cause a media firestorm. A growing furore over iPhone 4 signal strength flaws has hurt Apple’s shares ahead of its quarterly results next week.
Since June 28 — days after the launch, when complaints about faulty reception began surfacing on Internet technology websites — Apple has lost about $16 billion in market value, with at least some of that related to the iPhone controversy.
The stock fell as much as 2.1 per cent on Thursday, before closing down 0.5 per cent at $251.45 on Nasdaq.
“We do believe that Apple needs to be more proactive in identifying and addressing the issues for the iPhone 4,” BMO Capital Markets analyst Keith Bachman wrote in a research note. “A real risk is if the press keeps talking about this issue, iPhone 4 growth could slow.”
Some analysts suggest Apple could offer free protective cases for the device — which prevent the signal interference — at a cost of $1 to $2 each. That solution could cost $45 million. An in-store repair programme could run as much as an estimated $300 million.
Bloomberg and the Wall Street Journal on Thursday reported that Apple engineers had warned the chief executive, Mr Steve Jobs, in the early design phase of the iPhone 4 about the antenna design.
But Apple spokesman, Mr Steve Dowling, said the Bloomberg report was “simply not true,” while later declining to comment on the Journal report.