In the wake of Consumer Reports announcing that it would not be recommending the iPhone 4 due to the much-discussed antenna problems, there have been calls for Apple to recall the device. While a recall could be damaging to Apple's reputation, it would also be a costly endeavor, according to some calculations made by Bernstein Research analyst Toni Sacconaghi. In a research note on Tuesday, Sacconaghi estimated that while "a full product recall of the
iPhone 4 (is) highly unlikely," it would cost Apple $1.5 billion, or 3.5 percent of its total cash on hand.
What would be more likely--and cheaper--is that Apple could issue a free rubber bumper case with each phone. That would prevent a person's hand from coming into contact with the phone's antenna, which is built into its exterior metal strip. Although Apple charges $29 at retail for the rubber cases, Bernstein estimates that giving them away to
iPhone 4 customers would cost the company $1 per unit.
