Apple will not announce an iPhone 4 recall at its July 16 press conference, suggests one analyst, but may offer gift cards or free bumpers to compensate users who report dampened reception whenever the device's exterior antenna is touched.
will not announce an iPhone 4 recall at its July 16 press conference, predicts
one analyst, although the company could be preparing an extensive mea culpa
that includes monetary compensation.
Although the iPhone 4 proved
a considerable sales success in its early days of release, it has been
wrestling with reports of dampened reception whenever the device's exterior
antenna rim is touched. With Apple staying largely mum on the actual content of
the press conference, speculation abounds that executives will take the stage
to address the issue, as well as propose a solution.
In a July 16 research note,
Brian Marshall, an analyst with Gleacher & Co., wrote that he expects Steve
Jobs will host the event "and adopt a humble approach," that there will
be no iPhone 4 recall, that Apple will offer to refund the full purchase price
of the device for dissatisfied customers, and that it will focus on how the
signal degradation issues are reportedly being experienced by less than 1
percent of users.
Marshall also believes that Apple
will offer a verbal and monetary apology, the latter to the tune of either a
free bumper that covers the smartphone's antenna rim or a $30 gift card, and
will discuss the iOS 4.0.1 update from July 15. Either Jobs or another executive
will also "explain minor tweaks to future production (external and/or
internal) nonconductive coating to avoid short antenna issues."
When Apple pushed out iOS
4.0.1, the accompanying screen suggested the update "improves the formula
to determine how many bars of signal strength to display." Apple
had previously claimed in a July 2 statement that the formula it uses to
calculate that signal strength
was "totally wrong," and made an
iPhone "liable to display four bars' worth of signal strength when it
should, in actuality, be displaying as few as two bars."
Despite those claims of a
software issue with the iPhone, outside groups-including Consumer Reports and a
U.S. senator-have argued that
hardware lies at the heart of Apple's current problems. Consumer Reports wrote
on July 12 that it would be unable to recommend the iPhone 4 because of what it
termed "signal strength issues" related to touching the antenna rim.
Marshall seems to feel that those
complaints are somewhat overblown.
"We believe this topic
has already garnered far too much attention," he wrote, "but the
important part now is how Apple reacts from a public relations perspective. ... If
we are correct in our preliminary assessment above, we believe [Apple] will
rebound materially in short order."
Until the press conference at
1 p.m. EDT, though, it remains pure
speculation what steps Apple will take.